Thinking Minnesota Winter 2018

UNDETERRED Inside the obsession with ‘White Privilege’ & UNMANAGED that is roiling Edina’s public schools.

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CONTENTS

ISSUE 10 WINTER 2018

32

THE HIGH COST OF FAILURE

Minnesota has made meager progress in reducing greenhouse gas emissions since 2005. And it has cost a fortune.

UPFRONT

FEATURES

Peter Nelson heads for the Trump Administration (7)

7

The clock is ticking on pensions (14) Kersten testimony cites chaos in St. Paul schools (16) Crockett writes in the Wall Street Journal (16)

10

NEWS Mark Steyn: Fall Briefing (10) Roasters honor Mitch Pearlstein (19) YLC’s Grassel offers advice (20) Star Parker: Speaker Series (21) Center unveils planned giving program (23)

24 UNDETERRED & UNMANAGED

Inside the obsession with ‘White Privilege’ that is roiling Edina’s public schools.

40 STILL NOT AS GOOD AS YOU THINK

A serious look at our economy dispels the political hype that Minnesota is a ‘blue state that works.’

Reaching out to Greater Minnesota (23)

COLUMNISTS Ron Eibensteiner: Liberal activists are nothing if not well schooled in hardball politics (3) Tom Steward: Maplewood dismantles costly solar project (12) Mitch Pearlstein: A well-done roast (18) Guest Column, Lynn Shelton: American Experiment’s much-needed research on jobs (22) John Hinderaker: A year like no other (48)

44 THE CASE FOR MIDWESTERN HISTORY

No region has suffered more from historical neglect than the Midwest.

THINKING MINNESOTA

WINTER 2018 1

2018

ANNUAL DINNER GALA TUCKER CARLSON SATURDAY, APRIL 7TH, 2018 MINNEAPOLIS CONVENTION CENTER BALLROOM

Tucker Carlson

Host, Tucker Carlson Tonight Founder, The Daily Caller

To reserve a table or seat, contact Kristen Sheehan or Pari Cariaga.

Email ks@k2andcompany.com Pari.Cariaga@AmericanExperiment.org Register online at AmericanExperiment.org or phone 612.325.3597 / 612.584.4557

Center of the American Experiment’s mission is to build a culture of prosperity for Minnesota and the nation. Our daily pursuit is a free and thriving Minnesota whose cultural and intellectual center of gravity is grounded in free enterprise, limited government, individual freedom, and other time-tested American virtues. As a 501(c)(3) educational organization, contributions to American Experiment are tax deductible.

STAFF John Hinderaker President Mitch Pearlstein Founder and American Experiment Senior Fellow Kim Crockett Vice President and Senior Policy Fellow Katherine Kersten Senior Policy Fellow Catrin Thorman Policy Fellow John Phelan Economist Tom Steward Communications Director Kristen Sheehan Development Director Pari Cariaga Donor Relations & Events Coordinator Peter Zeller Director of Operations

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NOTE FROM THE CHAIRMAN

DEBATE? NOT LIKELY Liberal activists, especially educators, are nothing if not well schooled in hardball politics.

Senior Policy Fellow Katherine Kersten

John reported at the time. “They seemed wrote a 6,000-word cover story in the fall to think that if they said the word ‘race’ issue of Thinking Minnesota that revealed over and over again, the argument must how Edina’s schools were quietly using be over,” he added. “Frankly, it was rather curriculum to indoctrinate students with creepy.” extreme race-based, left-wing beliefs, beAnd maybe a little funny/sad. In the ginning as early as kindergarten, and how end, they dropped a box on our lobby state-based test scores in the district were floor that contained just 14 magazines, suffering a simultaneous decline. many of which were decorated with proAs you might expect, fane comments. her story, “Whose Values?

To be candid, we Educational excellence expected this kind of threatened by ideology reaction. We never in Edina schools,” hit a thought school leaders nerve in Edina, on both would greet the article sides of the issue. by saying, “Good quesIn October, two womtions! We’re glad you en, apparently furious that asked. Let’s talk about American Experiment it.” Honest discourse, it had mailed the fall issue seems, is no longer tolerof Thinking Minnesota to ated by liberal extremists every residential mailbox in America, especially in Edina, stopped by our among educators. We Golden Valley headquarexpected them to Ron Eibensteiner ters to fulfill a dramatic respond with anger and Facebook pledge that derision—and then to try they would return a cardboard box full of to change the subject, which they did. unwanted magazines.

Modern politicos (in both parties) The women were personally welcomed advise candidates to deflect unwanted to the Center by John Hinderaker, our conversations by first using ad homonym president, who solicited their input about attacks to undermine their interlocutors. the article.

Criticize their motives. Condemn them “As best I could interpret their answers personally. Call them names. This kind of to my questions, they claim that the many simple good-guy/bad-guy communicaEdina students, parents, teachers and bus tions tactic will energize your base allies, drivers who have related stories of bulsay the experts, because most political aplying in the Edina schools are all liars,” continued on page 4 THINKING MINNESOTA

WINTER 2018 3

continued from page 3 paratchiks don’t want to think; it’s easier just to hate.

Liberal activists, especially educators, are nothing if not well schooled in hardball politics. They bombarded our advertisers with a coordinated campaign of direct and indirect threats through postcards, phone calls, and emails.

Anonymous callers threatened lawsuits (apparently for exercising free speech).

Their Facebook echo-chambers resonated with shrill rhetoric and hateful name calling. None addressed the issue (that I could see), and none indicated that they had even read the article.

Education Minnesota, the state’s teachers’ union, retweeted a comment from someone who has spent too much time honing their humor in a fifth-grade classroom. “Keep fighting and expose

them for the Koch-funded stink tank they are,” it said.

Katherine’s article was inarguably a successful effort, so much so that the strong and vocal local reaction gave her ample material for a sequel, “Undeterred and Unmanaged: Inside the obsession with ‘White Privilege’ that is roiling Edina’s public schools” (page 24). Our mission as a think tank is to pose meaningful, consequential questions in difficult circumstances, which she did. I have never been prouder to be affiliated with Center of the American Experiment. We represented voices and interests that were being bullied and silenced by the oligarchical power of the radical insiders.

Like the novels ostensibly being taught in Edina’s Pre-AP English classes, Katherine’s analysis of Edina’s curriculum was written to address far more than

THINK

ABOUT THIS When considering the net negative affect of Minnesota’s business climate, consider the following timeline.

1998—Norwest Bank merged with Wells Fargo and moved its headquarters to San Francisco 1999—Honeywell merged with Allied Signal and moved its headquarters to Morristown, New Jersey 2001—Pillsbury was acquired by General Mills 2004—International Multifoods was acquired by J.M. Smucker, Orrville, Ohio 2008—Northwest Airlines merged with Delta Headquarters and moved its headquarters to Atlanta 2009—Travelers moved to New York City 2010—PepsiAmericas was acquired by PepsiCo, Purchase, New York 2011—Alliant Techsystems moved its headquarters to Arlington, Virginia 2011—Lawson Software was acquired by Golden Gate Capital, San Francisco, California 2012—Pentair moved its headquarters to London, U.K. 2013—Nash Finch was acquired by Spartan Stores, Grand Rapids, Michigan 2015—Medtronic moved its headquarters to Dublin, Ireland 2017—Arctic Cat was acquired by Textron, Providence, Rhode Island 2017—St. Jude Medical was acquired by Abbott, Chicago, Illinois 2017—G&K Services was acquired by Cintas Corporation, Cincinnati, Ohio 2017—Valspar Corporation was acquired by Sherwin-Williams, Cleveland, Ohio

4 WINTER 2018

THINKING MINNESOTA

it at first seems. Beyond the immediate circumstances inside School District 237, her story should evoke questions from parents, educators and policymakers about what is happening in K-12 classrooms across America. Who decides these values, and on what authority? And what are the long-term consequences?

How can it be that a public-school curriculum can attempt to indoctrinate students into a particular worldview, instead of guiding them to think independently and arrive at their own opinions?

Which leads me to a personal digression. No anecdote in the “Whose Values?” piece troubled me more than the teacher who reprimanded a fifth grader during class for wearing a Donald Trump t-shirt (before she retreated to the shelter of the teachers’ lounge where, according to another teacher, she tearfully questioned whether the student’s parents were … Republicans(!)).

I don’t give a fig about the emotional issues that reduced this person to such an agitated over-reaction, but I continue to stew about the harm her behavior inflicted on the vulnerable nine-year-old entrusted to her daily care. It’s not a radical concept to suggest that teachers must protect their students from bullying behavior, not instigate it. Because his shirt offended her fragile personal political sensibilities, this teacher chose to shame a child who likely “advocated” Trump in the same spirit that his shirt the day before promoted Spiderman, or Mr. Noodle the day after. The shame belongs on her.

If nurturing students’ self-esteem still occupies an exalted priority on the agenda of public school educators, as we have been led to believe, this teacher deserved rebuke from her colleagues and discipline from her administration, neither of which were apparently forthcoming. From another perspective, imagine the in-district outrage against a teacher who might chastise a student for wearing an Obama t-shirt to class. Calls for that teacher’s suspension would likely be shouted down by calls for his or her dismissal—and I would agree.

My point: Maybe it isn’t “about the children” after all.

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UP FRONT Bon Voyage

D.C. BOUND An American Experiment stalwart for 20 years, Peter Nelson takes a job in the Trump Administration.

Peter Nelson, vice president and senior

policy fellow at Center of the American Experiment, resigned in December to take an appointment in the Trump Administration. He is now a senior advisor to the Administrator of the Centers for Medicare and Medicaid Services (CMS).

His primary responsibility is to act as a liaison between the administrator and the

Center for Consumer Information and Insurance Oversight (CCIIO), the entity that regulates the insurance markets and the insurance exchange.

“There is no other organization in Minnesota right now that influences public policy more than the Center,” Nelson said. But the appeal of a D.C. position, he said, was irresistible.

Nelson developed a reputation as a policy analyst and frequent adviser to policymakers in the state legislature. But he was not above doing whatever else needed to be done. He originated the newsletter that became Thinking Minnesota magazine and is seen here hawking American Experiment t-shirts in the WCCO Radio booth at the Minnesota State Fair.

“It’s possibly one of those once-in-alifetime opportunities to go to D.C. and help make policy for the nation,” he said.

“I’m in a position to influence the policy that is being developed for the insurance markets across the country,” Nelson said. “And right now, the insurance markets are unstable. They need new ideas, they need to be pushed in a different direction. I’m not going to D.C. to sit on my hands. The system’s not working, and we’re making changes.”

“It’s possibly one of those once-in-a-lifetime opportunities to go to D.C. and help make policy for the nation.”

“I’ve been saying for a long time that Peter is one of the top health care experts in the country, and his appointment by the Trump administration bears that out,” said Center President John Hinderaker.

“If Peter ever tires of life in the bureaucracy, we hope he will come back home to Minnesota and the Center.”

Nelson’s experience at American Experiment positions him well to be one of those change makers. While at the Center, he developed a reputation for insightful analysis and imaginative problem-solving on a wide variety of public policy issues—energy, state tax and budget among them—but nowhere more than in health care. A member of the Minnesota Health Care Financing Task Force created by the legislature and governor in 2015, he became known for THINKING MINNESOTA

WINTER 2018 7

Nelson regularly consulted with state policymakers and the media about state and local governance.

developing policies based on competition and innovation among both health care providers and insurers, as well as policies to make public health care programs more sustainable and effective.

His worked received national attention earlier this year with a proposal that would allow employers to fund a health plan that gives their employees the same choice and portability found in the individual insurance market.

Nelson joined Center of the American Experiment in 1997, soon after graduating from Wheaton College. He stayed for most of the next two decades, pausing only long enough to attend the University of Minnesota Law School.

He spent 1997-2001 as a policy analyst; 2004-2006 as project director for Intellectual Takeout (at the Center); 20062010 as a policy fellow; and 2011-2015 as director of public policy. In 2016, Nelson was named vice president and senior policy fellow.

Nelson is universally credited with raising the Center’s stature at the legislature and access to policymakers after he took on the role of being the Center’s primary liaison with the legislature in 2006.

“When I started, we didn’t really have that much going on in St. Paul, back in 2005,” he says. “I had the opportunity to basically take a position at the Center that 8 WINTER 2018

THINKING MINNESOTA

was entirely focused on policy. I had a lot of freedom to do what I thought was in the interest of the Center and the best interest of Minnesota, when it came to policy.”

Nelson considers his central role as editor of The Minnesota Policy Blueprint to be his proudest achievement at the Center. The Blueprint, published in 2014, is a 240-page book of policy analysis and recommendations covering 10 issue areas. Nelson brought his meticulous editing skills and eye for detail to each chapter.

“We wrote a book that set a policy agenda for Minnesota, and that agenda is still being advanced,” Nelson says.

“We’ve already had remarkable success on a number of policy fronts.”

Nelson characterized his energy work (which continues on in the cover story of this issue of Thinking Minnesota) as highlighting the workforce, reliability and cost impacts of Minnesota’s expansive green energy policies. He has been one of the sole voices in the state promoting affordable electricity rates for Minnesota families and small businesses.

Another key interest of his writing

and research, according to Nelson, was how Minnesota’s tax and budget policies impact the state’s economic growth. His research on migration patterns of people and income to and from Minnesota constitutes the best evidence of how high taxes make the state a less attractive place to invest, work and grow a business.

Nelson regularly consulted with state policymakers and the media on these issues, as well as other important issues of state and local governance. His commentaries appeared frequently in the Star Tribune, Pioneer Press, and other local newspapers across Minnesota. His work has also appeared in the USA Today and the Wall Street Journal.

In addition to these

Nelson considers his central role as editor of The Minnesota Policy Blueprint to be his proudest achievement at the Center. The Blueprint, published in 2014, is a 240-page book of policy recommendations covering 10 issue areas. “And that agenda is still being advanced,” Nelson says. “We’ve already had remarkable success on a number of policy fronts.”

policy areas, Nelson analyzed legal issues, primarily related to the legitimacy of state and local governments’ actions.

Most recently, he authored an amicus brief supporting a challenge to the City of St. Paul’s attempt to bypass taxpayer protections in the state constitution by masking a general tax as a user fee.

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BOARD OF DIRECTORS OFFICERS Chairman Ron Eibensteiner Wyncrest Capital, Inc. Secretary Mark S. Larson Attorney, Messerli & Kramer

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Conservative humorist Mark Steyn

entertained at the sold-out Guthrie Theater for the Center’s annual Fall Briefing. The popular author and columnist entertained more than 1,000 people with a 45-minute speech. Steyn is the author of Lights Out, American

10 WINTER 2018

THINKING MINNESOTA

THINKING

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TOM STEWARD

SUBSIDIES SQUANDERED Maplewood dismantles solar project after getting $310,000 from taxpayers and Xcel Energy ratepayers.

There were no dignitaries on hand,

ribbons to cut or speeches on sustainability to commemorate the latest chapter in solar power at the Maplewood Community Center (MCC).

Five years after a massive $310,000 subsidy from taxpayers and Xcel Energy ratepayers, the St. Paul suburb now has nothing to show for the supposed model renewable energy project—except for 216 obsolete solar panels and 198 reflector panels headed for storage and, more than likely, oblivion.

The Maplewood Community Center’s rooftop solar system was one of

The St. Paul suburb now has nothing to show for the supposed model renewable energy project—except for 216 obsolete solar panels and 198 reflector panels headed for storage and, more than likely, oblivion.

dozens of green projects in Minnesota rolled out with little scrutiny under the 2009 federal stimulus program (ARRA), meant to put people back to work after the 2008 Great Recession.

A second stimulus solar power project installed at Maplewood City Hall remains in operation.

“It seems silly not to take advantage 12 WINTER 2018

THINKING MINNESOTA

Tom Steward

of it,” Maplewood Mayor Will Rossbach said when the City Council approved the project in December 2010.

“I think that’s certainly a risk worth taking.”

Yet it turned out to be a cautionary tale of the pitfalls of government-subsidized activities that are pursued only because of the availability of so-called “free money” from taxpayers and other sources.

“When ‘free money’ is on the table, governments can move forward with these programs knowing they won’t be held accountable for the outcome,” said Peter Nelson, Senior Policy Fellow at American Experiment. “That’s exactly what’s happened in Maplewood with hundreds of thousands of dollars in solar panels now gathering dust in

storage.”

The project’s $310,000 in capital costs were covered by a rainbow of federal and utility grants. State government directed approximately $50,000 in federal stimulus funds. Because the project used locally-sourced panels, utility ratepayers provided another $78,000 in “Made in Minnesota” solar money. In the end, the City of Maplewood had no “skin in the game.”

The local utility, Xcel Energy, kicked in another $90,000. Presumably, the project hung around long enough to collect $92,000 in federal production tax credits.

Under the best case scenario, it would have taken 70 years for federal taxpayers and utility ratepayers to break even on their investment, based on the $4,428 in estimated electricity savings generated annually for the city.

Yet the community center solar system didn’t come close, shutting down this fall after about five years in operation. The project ended—not because of an equipment breakdown—but because the MCC roof needed replacement, a factor evidently overlooked when selecting a site for the stimulus project.

In fact, the cost for the removal and potential reinstallation of the 200-plus solar panels essentially offsets the estimated $22,000 in total electrical savings realized by Maplewood so far.

It cost the city the equivalent of three years’ worth of solar power savings from the project—about $13,000— to have a contractor break down the system in recent weeks. City officials

THINKING

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estimate it would cost an additional $10,000 to $15,000 to have the panels reinstalled on the MCC roof.

While the solar generation system still works, it may never be plugged into the grid again, due to the reinstallation costs and its already outdated technology. A final decision will be made by spring.

“The technology has changed dramatically since 2011. They’re not even using those systems anymore,” said DuWayne Konewko, Maplewood Environmental and Economic Development Director. “They’re three or four steps ahead of that now. Way back then there was more money from the feds and the state. Most of that is drying up or has dried up.”

In the end, everyone loses. The $50,000 contributed by federal

taxpayers didn’t work as economic stimulus: by the time the project was installed in 2012, the state’s unemployment rate had already fallen back to pre-recession levels.

Federal taxpayers further contributed another $92,000 in production incentives, but missed out on an expected 15 years of carbon-free electricity

production.

Likewise, Xcel ratepayers contributed $78,000 to buy locallyproduced solar panels. But the Made in Minnesota solar subsidy failed to sustain a state solar industry and the program was shut down by legislators this year.

Finally, the $90,000 in additional ratepayer money is no longer helping the utility meet its renewable energy mandate.

“In the end, it just creates a hassle for the city staff and delivers zero benefits to the city residents,” Nelson said.

“They had the federal money hanging over their head and they couldn’t say ‘no.’”

Ultimately, everyone got paid on the deal except the people who fronted the money—taxpayers and ratepayers.

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THINKING MINNESOTA

WINTER 2018 13

Pensions Watch

The Clock is Ticking U.S. unfunded pension liabilities exceed $6 trillion: Minnesota’s share is at least $118.7 billion.

Both Bloomberg Markets and the

American Legislative Exchange Council (ALEC) agree: Minnesota’s 2016 unfunded pension liability for state and municipal employees (including most teachers) has well exceeded the $100 billion mark. ALEC says the 50 states have an accumulated shortfall of $6 trillion.

Bloomberg put the number at about $109.8 billion at the end of August, and now ALEC has released its figures at $188.7 billion. ALEC did not include the St. Paul Teachers fund because it is still technically “independent” of the state (the fund, which takes over $10 million in cash aid from state taxpayers every year admits to an unfunded liability of about $585,000; when calculated with a more reasonable risk rate, the shortfall is $1.7 million).

Given that the pension funds admit to only an unfunded liability for 2016 of about $18 billion, it is clear that the disagreement over how to calculate pension liabilities rages on unabated—and that we are not even having the same debate!

The authors of the ALEC report they used the actuarial figures reported by the pension funds but applied a more realistic risk rate to calculate the liabilities.

In case you are tempted to reject the ALEC report as the work of the “evil Koch brothers,” the ALEC report followed best practices recommended by the Blue Ribbon Panel on Public Pensions by the Society of Actuaries, the Mercatus Center and other well-regarded pension experts. The ALEC report used the U.S. Treasury bond rate of about 2.14 percent to calculate the liabilities (called a “risk” rate) instead of rates ranging from 7.55-8.5 percent used by Minne14 WINTER 2018

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sota’s pension funds.

What if for sake of argument, we split the difference and said the unfunded liability was about $60 billion?

Would that get the attention of voters, public employees, legislators? I think the government union executives from AFSCME, SEIU and the AFL-CIO already know the math but they are keeping their members in the dark. It is too hard to explain, and everyone is hoping they will be long gone before the pension tsunami hits. Who wants to admit that the state has failed to properly manage these

The 2017 valuations are just starting to appear on the pension commission website.

pension funds?

The 2017 valuations are just starting to appear on the pension commission website. So, while the legislative session is still a few months away, the pension funds and commission are busy preparing for what will surely be another very tough conversation around the health of these very important funds. And whatever they come up with will not move the needle. Until we stop digging a hole by moving new employees to defined contribution plans, the rate at which the liability grows will just increase.

I will continue to testify that this is the biggest financial problem the state faces that no one knows about—and the hardest thing we will ever fix. Why? Because more than 11 percent of Minnesotans— real people who have worked for government, or work for government now—are counting on these pensions. Minnesota has failed to make annual payments as a matter of course for more than a decade.

With every paycheck, public employees faithfully hand over a percentage of their pay, and taxpayers match or exceed that contribution. Both parties should be able to trust that the pension funds, employers and the State of Minnesota, have wisely set the right contribution rates, actually paid the full contribution each year and prudently invested the funds so when retirement finally comes, teachers, cops and the rest of our state and municipal workforce have the pension they were promised.

If that were the case, we would not have an unfunded liability no matter how you cut it.

—Kim Crockett

MINNESOTA’S LEADING CONSERVATIVE VOICE For 27 years, Center of the American Experiment has been Minnesota’s leading voice on behalf of freedom and conservative common sense. Most often, that voice has been that of Center staff and Senior Policy Fellows.

Sometimes, it has been that of honored guests and world leaders such as Bill Bennett, Jeane Kirkpatrick, Charles Krauthammer, George Will, Benjamin Netanyahu, and Margaret Thatcher.

But in either case as well as others, American Experiment’s work simply would not be possible—our many megaphones silenced— without the support of friends like you.

Would you be so kind to join us as we continue building a culture of prosperity in Minnesota?

All contributions are tax deductible.

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NEWS Unintended Consequences Kersten testimony cites chaos in St. Paul schools to argue against race-based disciplinary policies.

American Experiment Senior Policy

Listen for American Experiment’s Weekly Report

Mondays on the Garage Logic Network

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Fellow Katherine Kersten submitted testimony to the United States Commission on Civil Rights in Washington, D.C. last month for a public briefing entitled The School-to-Prison Pipeline: The Intersections of Students of Color with Disabilities. She said the briefing examined the race-based school discipline policies imposed on public schools by the Obama Administration in a 2014 “Dear Colleague” letter that declared that students should be disciplined based on their race or ethnicity, not their behavior.

She cited the chaos in Saint Paul Public Schools that resulted from the district’s race-based disciplinary policies, as an example. Kersten has written extensively in Thinking Minnesota and elsewhere about how, according to her testimony, “This flawed premise has led

to a host of disastrous, if unintended, consequences in schools where it has been applied.”

Race-based discipline policies in St. Paul, she said, “have generated violence and disorder, and produced an environment where learning is often impossible.” The reason? The policies have created “a segment of kids who consider themselves untouchable,” in the words of one veteran teacher.

Proponents of race-based discipline policies say they seek justice for poor and minority children, she wrote. “But it is poor and minority children, struggling to learn in anarchic classrooms, who suffer disproportionately from misguided equity policies. So long as disorder is allowed to flourish in the name of statistical parity, our nation’s yawning racial learning gap will continue to widen.”

Unions Smell Defeat Minnesota trickery in teachers’ union renewals.

Kim Crockett continued her national

activism against the mandatory collection of union dues from public unions this fall when she published an op-ed in the Wall Street Journal entitled “Unions Act as if They’ve Already Lost: The Supreme Court may soon ban so-called fair-share fees.”

The court this fall agreed to hear Janus v. AFSCME, a case in which state employee Mark Janus wants to stop paying mandatory union dues. A decision is expected by June 2018, and unions are already preparing to lose, Crockett suggests.

She pointed to a tactic in which Educa-

tion Minnesota is burying fine print in its annual renewal form.

“I’ve reviewed a copy of the form, which says the union is authorized to deduct dues from the teachers’ paychecks,” Crockett said. “It also includes the following fine print: ‘This authorization shall remain in effect and shall be automatically renewed from year to year, irrespective of my membership in the union, unless I revoke it by submitting written notice to both my employer and the local union during the seven-day period that begins on September 24 and ends on September 30.’”

A D V E RT I S E M E N T

WHY I SUPPORT Center of the American Experiment “The American Experiment asks questions to elevate and invite debate which causes us all to ask how we can help.”

Name: Brian Hedberg Occupation: Executive and Officer Office: Ready Credit Corporation, Eden Prairie, MN Alma Maters: University of St. Thomas, MBA; University of MN, B.S.B, Former Edina Public School Board Chair, Vice Chair, Treasurer and Clerk (2001-2008)

NOTE FROM THE FOUNDER

A WELL-DONE ROAST ‘My friends, we are free and we are blessed. And I will forever be thankful to all of you.’

As I write in late November, I remain

in the glow of Thanksgiving, only partially because the Vikings beat the Lions that Thursday. Playing a bigger part is having just finished reading Norman Podhoretz’s My Love Affair with America: The Cautionary Tale of a Cheerful Conservative. Choosing to finally read it was more serendipitous than planned, as I was simply looking for a book small enough to fit neatly into my brief case for a flight to Texas for a family wedding, but substantial enough to keep my interest.

And if nothing else, Podhoretz, editor of Commentary magazine for 35 years, is substantial.

It’s also fair to say he can be direct to the point of combative, as he was nearly 40 years ago when I finagled a deal with his secretary to interview him for my dissertation. Once sitting across from him, he opened by saying how he preferred doing his own research rather than helping graduate students with theirs, and proceeded to race through the most nuanced of my questions in less time than any of my 50-plus other interviewees. But all has been forgiven and rendered moot by My Love Affair with America, which is not a new book, released in 2000.

As is well-known in limited circles, Podhoretz—who is 87 and still kicking—was first a literary critic and political observer of the moderate left, then more radical left, then neoconservative right, and then what might be thought as basic, prefix-free right. Yet whatever scholarly, ideological, or political fights over the decades he may have provoked or jumped into, with friends as well as 18 WINTER 2018

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Mitch Pearlstein

foes, his gratitude and devotion to the United States is expressed in the book in terms more tender than brawly. Here is just one of the sweeter passages. “More Americans,” Podhoretz writes, “enjoy more freedom and more prosperity than any other people on the face of the earth, whether in the past or in the present.

Surely this entitles the United States of America to a place among the very greatest of human societies. And even more surely, it entitles this country to the love and gratitude of all whom a benevolent providence has deposited on the shores of—yes, a thousand times yes—‘the land of the free and the home of the brave’ to live their lives and make their livings under the sublime beauty of its ‘spacious skies’ and ‘from sea to shining sea.’”

Very nice.

In a second bow to providence, Podhoretz quotes from a concluding passage by William F. Buckley, Jr. in his autobiographical Overdrive: A Personal Documentary, published in 1983. “Complaint,” the late founder of National Review beautifully wrote, “is profanation in the absence of gratitude. There is much to complain about in America, but that awful keening noise one unhappily gets used to makes no way for the bells, and these have rung for America and are still ringing for America, and for this we are obliged to be grateful…. I must remember to pray more often, because providence has given us the means to make the struggle, and in this respect we are singularly blessed in this country.”

Very nice again.

Beyond last Thanksgiving, the most sacred of secular holidays, coinciding with my flying off to Fort Worth and fortuitously picking up a copy of My Love Affair with America, what else might explain this burst of thanks for thankfulness? I trust it has something to do with the gloriously appreciated honor bestowed on me the night before the flight: “A Well-Done Roast of the WellSeasoned Mitch Pearlstein,” a decidedly non-retirement party hosted by Center of the American Experiment and its Board of Directors. If you were among the 300 who attended, including a remarkable roster of Minnesota leaders who purposely and kindly failed to bust my chops, I trust we shared a volume when I concluded my own remarks by saying, “My friends, we are free and we are blessed. And I will forever be thankful to all of you tonight.”

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Honors

Roasters Honor Mitch Pearlstein A Who’s Who of policymakers participate in ‘A Well-Done Roast of the Well-Seasoned Mitch Pearlstein.’

A sold-out crowd of 300 people in

November attended the “Well-Done Roast of the Well-Seasoned Mitch Pearlstein,” American Experiment’s founder. Roasters included Sen. Amy Klobuchar, Sen. Rudy Boschwitz, Sen. Norm Coleman, Sen. Dave Durenberger, Gov. Tim Pawlenty, Rep. Tom Emmer, Rep. Jason Lewis, Rep. Erik Paulsen, Rep. John Kline, Peter Bell, Katherine Kersten, and Dane Smith.

Mitch at the Bat The outlook wasn’t brilliant for the Gopher State that day; the electoral map stood solid blue, and no change seemed on its way.

And then when Wheelock lost his race, and Ludeman did the same, a sickly silence fell upon us thinkers – could the 1990s change the game?

A many few packed for Naples in despair.

The rest clung to the hope that change was in the air; they thought, if only Mitch would move to Minni from his home out East – they’d put up even money now that Mitch would tame the liberal beast.

Then from five thousand throats and more there rose a lusty yell; it rumbled across Golden Valley, it rattled in the dell; it echoed across 10,000 lakes and recoiled upon the flat, for Mitch, mighty Mitch, was advancing to the bat.

There was ease in Mitch’s manner as he settled into his chair; there was pride in Mitch’s bearing, and he still had all his hair.

And when, responding to the cheers, he deftly touched the keys, no liberal at the Strib could doubt what was coming surely would not please.

Ten thousand words went flying as his fingers hit pay dirt; five thousand more were entered, as he spilled lunch on his shirt.

And when the writhing snowflakes placed their hands against their hips, defiance gleamed in Mitch’s eye, a smile curled Mitch’s lips.

Like a blizzard the lucid writings came hurtling through the air, as the mighty Mitch sat watching in haughty grandeur there.

Close by the sturdy wordsmith the tide of changed opinion sped – “That’s more my style,” said Mitch. “We agree,” the people said.

But from the panicked leftwing newsrooms there went up a muffled roar, like the pounding waves of Lake Superior on a stern and distant shore.

“Silence him! Silence Mitch!” the ink-stained wretches yelled; and it’s likely they’d have silenced him had not Mitch’s courage held.

With a smile of Jewish charity, great Mitch’s visage shone; he stilled the rising tumult; he bade the debate go on; he signaled to the opposition – “there’s room for differing views.”

Then back to his keyboard the great Mitch went, and out came Blueprint Two. “Fraud!” cried the sheltered class, and echo answered fraud; but more insightful words from Mitch and the audience was awed.

They saw his face go stern and cold, they heard him softly say: “Center of the American Experiment will provide a better way.”

Oh, all across this favored land the sun is shining bright; bands are playing, people are dancing and everywhere hearts are light.

Men and women are laughing and happy children shout; for there is great joy in Minnesota – the ideas of Mitch Pearlstein have won out!

—Ode written and performed by Chuck Spevacek and Robin Kelleher, American Experiment board members.

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NEWS YLC Profile

Advice for Young Conservatives A long veteran of conservative causes, Twin Cities lawyer counsels young activists to read.

A conservative activist almost since

the day that he arrived on the Bethel campus in 2000 from his parents’ home in Williston, North Dakota, Jake Grassel says today’s campus conservatives must prepare diligently for a much more hostile campus environment than during the long tenure in which he led Minnesota’s college Republicans.

Grassel’s initial interest on the Bethel campus was as a member of its varsity hockey team, but he was quickly drawn into the 2000 presidential campaign between George W. Bush and Al Gore.

He immediately joined Bethel’s College Republicans, and eventually became state chairman. He also became a regional vice chair with the College Republican National Committee (CRNC), even taking a semester off to work as a field staffer for the CRNC during the 2002 election.

His tenure as state chair, he remembers, included mostly amiable working relationships with the college Democrats and other liberal organizations on campus. “We knew who they were. A lot of them were our friends,” he says, “and we were able to have respectful conversations. At the time, it seemed like we all wanted a better future for America. It was just that we differed on what that better future looked like, and how to get there.”

Today’s campus relationships aren’t quite so cordial, he says. “The general make-up of students today—how they perceive the world, how they perceive life—is much different than it was when I was on campus in early 2000s.” He’s not sure why, maybe different attitudes about parenting, or the fact that there’s increasing divisiveness in national politics. But it also has something to do 20 WINTER 2018

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with the attitudes of professors, who no longer allow opposing views to be heard and respected.

“The campus culture now is one that seeks to indoctrinate, and literally change those views that students had entering campus,” he says.

Success in that environment, he says, requires that young conservatives go into it prepared. “They need to be well read.

They need to understand precisely what they believe and why they believe it.

They need to be armed with the knowledge to fight back,” Grassel says.

Grassel suggests a daily dose of the

Jake Grassel, a member of American Experiment’s Young Leadership Council, is an attorney at Plymouth-based Howse & Thompson, P.A.

Wall Street Journal, Drudge, and the Huffington Post, “just to see what’s out there on both sides,” he says. “And I’m a Power Line guy,” the website founded

by American Experiment President John Hinderaker.

He also warns against the social media-inspired practice of getting news in 140 character bursts. “We’re really becoming a headline culture,” he says. “Even linking to a news story, as we’ve all kind of known, the first few paragraphs of a news story are what’s generally read.” You’ll see that anytime you read the comments that people will leave online following articles, he says.

“They often comment only about the first three paragraphs.”

Today, Grassel is an attorney at Plymouth-based Howse & Thompson, P.A. He chose law school, he says, thinking it would be a good training ground for a career in public policy work. “I do a little bit of public policy work,” he says, “but that’s not my primary practice. I tend to do my public policy work as volunteer activity,” which he fulfills in part as an active member of American Experiment’s Young Leadership Council (YLC).

He says he is investing time and energy in the YLC because it gets people “away from just the everyday politics and more towards getting people talking about policy, which I think is extremely important,” he says. He estimates he meets a half dozen new people at every event. “The organization’s growing. It’s having, I think it’s having a good effect in our community. People are leaving our events excited to do more, and wanting to get more involved—and actually thinking and talking about policy.”

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Parker’s Prescription Star Parker closes luncheon series with a no holds barred indictment of liberal policy-making.

Conservative writer and leader Star

Parker closed out American Experiment’s annual speaker series with a rousing sold out luncheon speech on November 7 at the Minneapolis Hilton Hotel.

Parker is the founder and president of the Center for Urban Renewal and Education (CURE), a public policy think tank based in Washington, D.C. CURE’s mission is “to fight poverty and restore dignity through the message of faith, freedom and personal responsibility.”

Her speech was entitled, “The Inner City-Fix: How Improving Our Communities Will Cure Racial Polarization.”

It’s no accident that poor children are three times more likely to be born into a single family household, she said.

“The Left’s answer to everything, liberal answers to everything, was just pour government money at it: government welfare, government schools, government housing, government wage loss, government jobs, government retirement.

All of which have fed the conditions of despair and have now spread a cancer in every state in the union, and in particular in our most vulnerable zip codes, and

hurt the people that we as a society thought we were going to be helping through the Great Society build-up in the ‘60s or the promise of the Great Society build-up.”

Before involvement in social activism, Parker had seven years of firsthand experience in the grip of welfare dependency.

After consulting on federal Welfare Reform in the mid-90s, she founded UrbanCure to bring new ideas to policy discussions on how to transition America’s poor from government dependency.

Parker regularly consults with both federal and state legislators on marketbased strategies to fight poverty; she has spoken on more than 190 colleges and universities about anti-poverty initiatives.

American Experiment’s award-winning investigative researcher/reporter Tom Steward is watching government for your benefit.

Get his timely news alerts at

AmericanExperiment.org.

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NEWS GUEST COLUMN: LYNN SHELTON

THE NUMBERS PROVE IT American Experiment’s much-needed research confirms the enduring value of manufacturing careers in the 21st century. It should yield nation-wide significance.

Frustrated manufacturers in Minne-

study is the self-limiting nature of its title. It may have used Minnesota as its data set, but its findings convey nationwide value. To my knowledge, there isn’t a similar study anywhere that makes the empirical case so compellingly. There is not a state in the union that wouldn’t benefit for this knowledge.

In my experience, manufacturers nationwide have aggressively attempted to show students the opportunities and sophistication in modern manufacturing. They use job fairs, plant tours and classroom visits to showcase their clean, high-tech facilities and dispel the stubborn myths that manufacturing jobs are tedious and dirty, intellectually unchallenging, and without opportunities for advancement and compensation. This study uses hard data to put that notion to rest.

None of Griffith’s study—or anything I’ve ever written—disparages the value of a solid four-year college degree.

Hardly. But she makes a valuable point that only 22 percent of jobs in Minnesota require a four-year degree, while the education establishment pushes more than half of high school graduates in that direction.

Griffith computed the cost of education and median hourly wages in each field Lynn Shelton is vice for workers in the Twin president of marketing Cities and statewide, using at Enterprise Minnesota, data from the State. Then she a manufacturing calculated a median lifetime consulting company that earnings profile for each ocis part of the nationwide Manufacturing Extension cupation that could be directly Partnership. compared to the median lifetime earnings of Minnesotans

sota have long chafed at the reality that their ability to offer satisfying, well-paid careers is still mostly unrecognized by an informal (and ill-informed) cartel of parents, counselors and teachers who think that seeking anything less than a four-year college degree would constitute as settling for second best.

How about settling for more money?

When Center of the American Experiment released a study this fall entitled, “No Four-Year Degree Required: A look at a selection of in-demand careers in Minnesota,” it demonstrated how lifetime earnings of students who follow a two-year degree path can actually exceed their four-year counterparts—by as much as 61 percent.

The Center recruited Dr. Amanda Griffith, a labor economist at Wake Forest University. She selected a cross-section of occupations that do not require a four-year degree and estimated the long-term financial rewards for an 18-year-old Minnesotan looking to the future, while also factoring in the costs of post-secondary education.

The only disappointment with the

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with four-year college degrees.

The surprising results reveal that numerous occupations that do not require a college degree pay more than the $25.30 per hour median wage earned by four-year college graduates in Minnesota.

For example, Griffith found the estimated median lifetime earnings for CNC machinists beat college graduates by 11 percent.

This information complements data from the National Association of Manufacturers: of the 3.5 million jobs that manufacturers will require by 2025, two million are expected to go unfilled for the lack of qualified applicants. These findings should intrigue policy-makers (of any political persuasion) that the manufacturers who will bring jobs and economic prosperity during that time will reside in states whose companies, educators and policy-makers have already collaborated to solve the skills gap and fill those jobs.

I’m hopeful that this study will be widely circulated so that people will come to recognize the well-paying, secure and challenging careers that are available in modern manufacturing facilities. This includes teachers, guidance counselors and parents. It should also include anyone who cares about the economic vitality of their communities. But none of these people are likely to stumble upon it on their own.

I encourage manufacturers to download it (www.AmericanExperiment.org) and share it widely. There are a lot of young people whose career choices may depend on it.

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A New Program

Planned Giving American Experiment announces Legacy Partners.

The Center was surprised to learn

from the bank handling her estate that longtime supporter Ann Krebes had left a generous bequest to American Experiment in her will.

“By the time I knew about her gift, it was too late to say thank you,” said John Hinderaker, president of Center of the American Experiment.

That experience led American Experiment to create Legacy Partners, a program that will enable the Center to encourage legacy giving, but also “know about, and thank, the people who are thoughtful enough to provide for the Center in their wills,” Hinderaker said.

Many people might enjoy the benefits of legacy giving. It may reduce estate taxes. It may provide more control of their assets during their lifetimes and thus, assure that they don’t run short.

In addition, it enables some people to make a larger gift than they would feel comfortable with during their lifetime.

People can become Legacy Partners

merely by informing the Center that they have included a bequest to the Center in their will. In return, Legacy Partners will receive invitations to all Center events. And with their permission, will be listed as a Legacy Partner in published materials throughout the year.

To help facilitate legacy giving, the Center has also created the American Experiment Foundation, a fund that will exist solely to support the Center’s programs and activities. Legacy gifts may be designated to the Foundation or directly to the Center.

“American Experiment has been serving the State of Minnesota for 27 years,” Hinderaker said. “We plan to be Minnesota’s leading voice for conservative, free enterprise, common sense solutions for many years to come.

Legacy giving is one way our supporters can help to ensure our movement continues to thrive and to grow, long into the future.”

The Greater Minnesota Outreach Project Center of the American Experi-

ment next year will unveil a project designed to attract more effective participation from conservative leaders and activists in Greater Minnesota.

Center President John Hinderaker and Chairman Ron Eibensteiner have begun a series of listening sessions to determine how the Center’s policy proposals and other activities can

Our website has more than doubled the number of visitors in the last year.

Find out why: AmericanExperiment.org

gather significant input from conservative leaders and activists statewide.

“Almost nothing we do affects only the Twin Cities metropolitan market,” Eibensteiner said. “Statewide policies are always stronger when we bridge the interests of all the regional powers.”

They recently met with leaders in Rochester.

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FOLLOW UP

UNDETERRED & UNMANAGED Inside the obsession with ‘White Privilege’ that is roiling Edina’s public schools.

By Katherine Kersten

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T

he Fall 2017 issue of Thinking Minnesota featured an article by American Experiment Senior Policy Fellow Katherine Kersten that described the egregious politicization of the Edina Public Schools (EPS). The article was entitled “Whose Values? Educational excellence threatened by ideology in Edina schools.” To say it stirred up a “Hornets’ nest” would be putting it mildly.

The article showed how the ideology of racial identity politics—which holds that “white privilege” is to blame for all problems minority groups face—now dominates Edina’s schools. It included disturbing accounts by students and parents of classroom indoctrination, and of the bullying of students who hold non-conforming views on the ideological trinity of “race, class, and gender.”

Since the article appeared, Kersten has gathered troubling new information on what’s happening in the Edina schools.

We now have more details on what it means—in district leaders’ minds—to view all “teaching and learning experiences” through the lens of racial “equity” as EPS’s “All for All” plan requires. The article that follows provides an update.

Kersten’s original article provided strong evidence that sweeping changes must occur if the Edina schools are to return to the proper mission of public education. But many Edina residents resisted this conclusion. In part, this was because the families who described alarming classroom persecution to the Center were reluctant to speak out publicly, fearing retaliation against their

students in the form of public shaming and lowered grades.

Now, however, one family has courageously stepped forward to tell its story.

The account makes clear the Edina school district’s “racial equity” agenda is actually driving out some of the very students it is ostensibly designed to benefit.

Orlando Flores is the father of a Hispanic student who left Edina High School (EHS) to pursue Postsecondary Enrollment Options in Fall 2017, his senior year, because of what Flores calls “the pervasive ‘viewpoint discrimination’ and closed-mindedness” being taught at the school. The Flores family’s unique personal background gives the issue special urgency for them.

Orlando Flores and his parents escaped a Marxist regime in Nicaragua in 1979.

“We became refugees to avoid the political indoctrination that is the hallmark of absolutist regimes and intolerant philosophies,” he said in an interview. “We can’t stand by silently now while any group— from the right, left or wherever—moves to squelch freedom of expression here in America, in our children’s public schools.”

The Flores’ son was an outstanding student at EHS, a National Merit semifinalist who scored at the highest level in many Advanced Placement classes and exams, according to his father.

His son experienced and witnessed many instances of political indoctrination and viewpoint repression while at EHS, Flores says. Finally, one particularly disturbing event led the family to say

About the Author: Katherine Kersten, a writer and

attorney, is a senior policy fellow at Center of the American Experiment. She served as a Metro columnist for the Star Tribune from 2005 to 2008, and as an opinion columnist for the paper for 15 years between 1996 and 2013. She was a founding director of the Center, and served as its chair from 1996 to 1998.

“enough.”

In the 2016-17 school year, his junior year, Flores’ son took a required 11thgrade English class from a teacher who, like others at EHS, regularly used class time to “criticize politicians and political principles” with which they disagreed, according to Flores. When assigned to give an oral report about a “modern-day witch hunt,” Flores’ son and a classmate

Students are instructed in white supremacy and “Whiteness as property;” encouraged to tell their personal “racial awakening stories;” and led to view human beings, first and foremost, as members of racial and ethnic groups rather than unique individuals who transcend their skin color.

chose a topic “inconsistent with the teacher’s political orientation”—the actions of student protesters at the University of Missouri following high-profile racial incidents in Ferguson, Missouri.

The presentation was supposed to take seven to 10 minutes. When the boys were finished, however, the teacher forced them to stand in front of the class for about 40 minutes and endure relentless criticism from both the teacher and the “most liberal students in the class— all white,” Flores’ son wrote in an email to me. (The teacher called this bringing in “multiple perspectives,” he adds.)

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The boys asked to sit down several times, but the teacher refused to allow them to do so.

During six days of oral reports, only one other team of students was subjected to similar grilling, Flores’ son wrote. This team’s report—on affirmative action— also took a position contrary to the teacher’s. Other presentations, which reflected liberal perspectives, “were let through without any problems” and discussion of

EHS teacher Jackie Roehl wrote an essay in More Courageous Conversations about Race in which she reveals that the EHS English Department purposely designed Pre-AP English 10 as a year-long vehicle for indoctrinating all sophomores in “white privilege” and racial identity politics.

them was not allowed, he says. After one such presentation, Flores’ son “not only raised his hand, but shouted out, ‘Let’s discuss this,’ but the teacher refused to allow open discussion.”

“This is a typical way that bias is introduced and indoctrination occurs,” Flores told me:

Those in authority choose what they want to go unchallenged and what to suppress.... Sadly, many students told my son after his presentation that he should have known that this would happen—in other words, that it’s best to be silent and not express any con26 WINTER 2018

THINKING MINNESOTA

trary viewpoint. I, however, applaud my son for his courage.

Flores says his son felt persecuted by the classroom “witch hunt” he endured and wrote to the teacher asking for an apology. Instead, the next day, he was “abruptly” summoned to EHS Principal Bruce Locklear’s office to “clarify” the previous day’s events. He was admonished not to call his parents, but did so anyway, according to Flores.

Flores’ wife hurried to school to discuss the matter with the principal. “Like so many other documented cases” at EHS, says Flores, the principal “simply took the teacher’s side and denied any wrongdoing.”

Fearing retribution, Flores’ son asked to transfer to another English class.

There, however, according to his son, a student teacher told students that they would not be reading classic texts because “dead white men are boring,” says Flores. The supervising teacher raised no objection to this remark, he says.

“After this experience and many other instances of viewpoint repression” at EHS, the Flores boy decided to leave Edina High School. The family also withdrew its 15-year-old daughter.

While at the high school, Flores’ son repeatedly saw classmates publicly humiliated and shamed, and forced to defend themselves from groundless charges of racism, according to his father. He told his parents that many teachers “immediately group and label” students who “don’t agree with them 100 percent.” He also reported that “discussion sessions” at the school are often really “one-sided indoctrination sessions, not true, multifaceted discussions.” In fact, in his son’s 11th-grade English class, the teacher often stopped his son during “discussions” and “wouldn’t even let alternative views be talked about in her class,” Flores said.

Flores describes what he views as a pervasive, and dangerous, problem at Edina High School. His son and other minority students who have been persecuted—“some of the brightest in the school”—left Edina High, he says, adding: These are not isolated cases. There

are more minority families who have pulled their kids from EHS because the kids are tired of feeling different and separate by the school’s relentless obsession with race—which has permeated every aspect of teaching and class in the school—and because they want a better education where strong academics are taught without fear of retribution.

Flores emphasizes that he believes race and racism need to be discussed, alongside other factors that affect academic performance, such as socioeconomic differences. However, “relentlessly obsessing about them and pretending that race is the only thing that matters is counterproductive and harmful to everyone, especially those whom it seeks to help, as experienced by my son and other minorities” at EHS, Flores says.

Flores urges EHS leaders to take a new path forward that starts with strong academics and help for new immigrants and low-income students, who—unlike many Edina students—can’t afford tutors to “bridge gaps in their education.”

Clearly, EPS’s racial equity plan is a failure in two important respects. First, it has created a school climate—especially at Edina High School—that is toxically intolerant of diversity of thought.

Second, it has failed to accomplish its goal of improving the academic performance of black and Hispanic students.

Between July 2014 and June 2017, the district’s Achievement and Integration Plan sought to increase student proficiency on all state reading accountability tests and to decrease performance gaps between white students and black, Hispanic and low-income students.

But at the end of the period, overall reading proficiency had not improved, nor was the racial-ethnic achievement gap reduced. In fact, scores for black, Hispanic and white students actually dropped, while Asian students’ performance stayed the same.

How much have taxpayers spent on EPS’s racial equity campaign—now nearly a decade old? Costs have included pricey national and local “diversity” consultants; sweeping equity training for district employees; equity-related

Roehl’s detailed description of the new course’s ideological motive and content confirms that the high school is substituting political indoctrination for legitimate academic instruction—and apparently seriously dumbing down instruction in the process.

positions within individual schools; and a variety of race-focused events for parents and students.

Parents are left in the dark

Since my original Thinking Minnesota article appeared, the Center has learned more about how racial identity politics became entrenched in the Edina schools, and how this extremist ideology has affected the curriculum.

One important source of information on this point was an essay penned in an unguarded moment by EHS English teacher Jackie Roehl. Roehl was a designer of Pre-AP English 10, the required 10th-grade English class at Edina High School that forms the ideological

backbone of the school’s “racial equity” indoctrination.

EHS introduced Pre-AP English 10 and made it a required course in 2012-13, around the time the All for All plan made racial identity politics a centerpiece of the EHS curriculum. In an announcement to parents and students, the high school portrayed the new course as a rigorous class designed to “provide students with a common experience” and enhance “citizenship.”

But Roehl painted a radically different picture in an essay she wrote for More Courageous Conversations about Race—a publication of the Pacific Educational Group (PEG). PEG served as a diversity consultant for EPS for several

years starting in 2009.

In her essay, Roehl reveals that, in fact, the EHS English Department purposely designed Pre-AP English 10 as a yearlong vehicle for indoctrinating all sophomores in “white privilege” and racial identity politics. Students are instructed in white supremacy and “Whiteness as property;” encouraged to tell their personal “racial awakening stories;” and led to view human beings, first and foremost, as members of racial and ethnic groups rather than unique individuals who transcend their skin color. Roehl’s essay, and my post about it on the Center’s website, can be accessed at https://www.americanexperiment.org/2017/10/teacher-revealsrequired-english-course-aims-eradicatewhite-privilege-edina-high/.

Making matters worse, the Center learned that a new analysis of the texts used in Pre-AP English 10 suggests that their average reading difficulty (Lexile) is at approximately the fifth-grade level. The analysis was performed by a group of Edina residents who consulted Lexile.com—the website of the organization that developed the Lexile Framework for Reading—to determine the reading level of the books, and then averaged the Lexiles of core and “choice” books in a way that reflected their potential use in the course.

When EHS announced the new required Pre-AP English 10 course in 2012, it claimed that student assignments would be “carefully chosen” for their “rigor,” since “we’re aiming for the top.” In fact, the texts used in the course do not prepare 10th-grade students for future academic challenges, either in high school or college, if the new analysis is correct.

Not surprisingly, most of the books used in the course are contemporary works with political themes, or works that lend themselves to interpretation through a “race, class, gender” lens. Even assignments that don’t appear to be ideological on the surface can be twisted to fit an agenda. For example, EHS’s 2012 announcement of the new course lists a unit on Fort Snelling, and then notes that Fort Snelling will be studied “as a concentration camp and Dakota genocide.”

EHS’s design and implementation of THINKING MINNESOTA

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Pre-AP English 10 is a textbook example of political propaganda. Propagandists attempt to manipulate people to achieve their ends by disguising their real agenda. Roehl’s detailed description of the new course’s ideological motive and content confirms that the high school is substituting political indoctrination for legitimate academic instruction—and apparently seriously dumbing down instruction in the process.

New information about “white privilege” training for staff

Since the publication of my Thinking Minnesota article, the Center has also learned more about how EPS’s focus on racial “equity” has shaped professional development for teachers and staff members.

For example, after the article appeared, the widow of a former Edina school bus driver told us that EPS had compelled her husband to attend “white privilege” training in 2012, and that he had found its ideological bias so appalling he had saved the materials. She forwarded them to us.

The training session, which took place on July 19, 2012, was entitled “Edina School District Equity and Racial Justice Training: Moving from a Diversity to a Social Justice Lens.” A Minneapolisbased organization called the Hackman Consulting Group conducted the session. Other Edina school employees also apparently attended the training, along with bus drivers.

The Hackman Group is operated by Heather Hackman, a former St. Cloud State University professor. According to her group’s website, Hackman consults nationally on “issues of deep diversity, equity and social justice and has focused most of her recent training work on issues of racism and white privilege, gender oppression, heterosexism and homophobia, and classism.”

Sample trainings listed on the website include “Developing a Critical Racial Equity Lens: Addressing Race, Racism and Whiteness in Education” and “Teaching Climate Change Through a Social Justice Lens.”

The Hackman Group training session 28 WINTER 2018

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DEMANDING A VOICE

Edina Young Conservatives Club responds to student bullying and school indifference by filing a lawsuit in federal court.

On December 7, 2017, the EHS Young Conservatives Club (YCC) and five of its student members brought a lawsuit against defendants Edina Public Schools, Superintendent John Schultz, and Edina High School Principal Andrew Beaton.

The suit—filed in federal district court in Minnesota—followed years of violations of students’ constitutional rights to freedom of speech by Edina school authorities. Its context was set, in part, by the district’s decision in 2013 to view all “district work,” “initiatives,” “teaching” and “learning” through the “lens” of racial equity.

The students filed the suit after Principal Beaton banned the Young Conservatives Club—a non-sponsored, unofficial Edina High School (EHS) student club—on November 13. Briefly, the facts are these: On November 9, EHS sponsored a Veterans Day assembly in the school gym.

A group of veterans spoke about their service to America, and the National Anthem and “Taps” were played. During these songs, a group of

students chose to “protest” by refusing to stand, sprawling on the gym floor by the bleachers, and disrupting the event by talking loudly and playing music on their cell phones.

Members of the YCC criticized the protesters’ conduct, both at school and on social media. Over the following weekend, the protesting students and their supporters denounced the YCC on social media (see nearby examples), and YCC members continued their criticism.

Shortly thereafter, a group calling itself the “Edina High School Anti-Fascists” posted a YouTube video in which a masked student issued threats against the YCC. A mechanical voice ominously intoned the threats, which included statements like “we at EHS Anti-fascists have decided that your club cannot continue to exist in its current form” and “[w]e will not stop until every tentacle of your evil monstrosity is sliced off at the nerve.”

The “Anti-Fascists” demanded that the YCC “remove every student who has frequented racism from your club” and closed with a final threat: “Consider yourselves warned.”

The Young Conservatives Club complained to Beaton about these threats, but—according to the lawsuit complaint— he “simply excused” their harassers.

for school bus drivers and other EPS employees was an exercise in ideological re-education uncomfortably reminiscent of tactics employed by authoritarian regimes.

The instructional materials called for trainers to berate and humiliate district employees, labeling them racists who profit immorally every day from “white privilege.” During the session, employees were exhorted to denounce their own presumed bigotry, acknowledge their guilt, transform their self-understanding, and embrace the Edina school dis-

A group calling itself the “Edina High School Anti-Fascists” posted a YouTube video in which a student hid behind a Guy Fawkes mask and issued threats against the YCC. A mechanical voice ominously intoned the threats, which included statements like “we at EHS Anti-fascists have decided that your club cannot continue to exist in its current form” and “[w]e will not stop until every tentacle of your evil monstrosity is sliced off at the nerve.”

Subsequently, in a public communication on November 13, EPS Superintendent John Schultz called the Antifa video “inflammatory and creepy,” but dismissed the fears of YCC members and their parents on grounds that an investigation had “uncovered no credible or legal threat.” (Schultz’s reaction would likely have been very different if the YCC had issued threats like this against EHS’s Black Student Union.)

Meanwhile, the Veterans Day protesters and their supporters continued to threaten and harass the conservative students. Groups “as large as 30 students were daily surrounding club members and threatening to injure them if they did not change their political views,” according to the complaint.

One of the student plaintiffs confirmed this in an interview: The protesters and their allies “crowded YCC members in the hall, pushed them into lockers, taunted them, threatened to beat them up, and chased them,” she said. “Some of the kids were afraid to come to school. They only walked in the halls in groups, or tried to find alternative routes to class.”

But when the YCC students told Beaton they feared for their safety, he “responded to their security concerns by saying that

[they had] brought it upon themselves by criticizing the protests” at the Veterans Day program, according to the complaint.

According to the complaint, on November 13 Principal Beaton called the president of the YCC into his office, demanded to examine his cell phone, looked at the club’s GroupMe (a private group text messaging app), and then ordered the president to disband the club by deleting its GroupMe. In addition, Beaton suspended four students who had criticized the protesters on the private GroupMe. Yet EHS authorities apparently took no disciplinary action against the Veterans Day protesters; the students who posted insulting and disparaging messages about YCC members on social media; or those who physically threatened and harassed the conservative students to the point of causing them to fear for their safety.

“EPS’s policies suggest that ‘all are welcome here,’” concludes the complaint, “but what EPS really means is that all are welcome except conservatives.”

The YCC’s federal lawsuit asserts that the Edina school district has violated the student plaintiffs’ rights of freedom of speech and association under the First Amendment. •

Hackman trainers— astonishingly—asserted that white racism is biological in nature.

“White conditioning begins when white bodies are preverbal,” according to the flyer for the session. trict’s ideology of racial “equity.”

Trainers instructed district employees that “dismantl[ing] white privilege” is “the core of our work as white folks.”

This “work,” they maintained, will “requir[e] a major paradigm shift in the thinking of white people.” A paradigm shift in one’s thinking is a lot to demand from individuals who simply want to drive a bus for the Edina schools.

The “Edina School District Equity and Racial Justice Training” materials included a bizarre history lesson that exemplifies their extremist nature. In a lesson entitled “The Invention of the White Race,” participants were taught that the white race did not exist until the last several hundred years. According to the materials,

The 18th and 19th centuries saw the emergence of the ‘white race’ as a deliberately constructed social group for the first time in U.S., and perhaps, in world history. The reason for this was two-fold: THINKING MINNESOTA

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The instructional materials called for trainers to berate and humiliate district employees, labeling them racists who profit immorally every day from “white privilege.”

During the session, employees were exhorted to denounce their own presumed bigotry, acknowledge their guilt, transform their self-understanding, and embrace the Edina school district’s ideology of racial “equity.”

1) To codify the political, economic, and cultural ‘superiority’ of whites, 2) To drive a wedge between poor whites and people of color, thus minimizing their identification with each other and organizing against the power of the white elite.

This preposterous claim is intended to justify the “power” equation at the heart of the Edina School District’s racial equity ideology—“Whiteness=White Privilege + White Supremacy,” as the training materials put it.

Equity trainers used the following definitions to explain to bus drivers the need for white guilt:

Whiteness (WN) is the overwhelming presence of white centrality, white normativity and white supremacy in our society.

White Privilege (WP) is the systems of advantages and benefits that white folks receive as a result of WN and racism in our society.

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White Supremacy (WS) is the ideology (values, beliefs, ideals and cultural markers) that justifies racism on all levels (individually, culturally and institutionally) and supports the existence of WP.

The training materials asserted that “Whites are actively taught not to see their privilege: They are meant not to notice the benefits and advantages they get as a result of being white.”

The reason? “Super Whitey”—a menacing figure undefined in the materials—“likes to keep whites oblivious to these benefits.” Black people, trainers insisted, cannot be racists.

The “Edina School District Equity and Racial Justice Training” session concluded with role-playing by participants, in which they were required to parrot back the ideological orthodoxies they had absorbed.

The Edina school bus driver’s widow who sent us the Hackman materials said that, according to her husband, drivers who attended the training were not allowed to disagree with or debate the group’s premises. The widow added that her husband told her that participants who seemed inattentive or resistant could be required to repeat the training.

Edina bus drivers were not the only EPS employees subjected to Hackmanled racial equity training. Teachers, staff and administrators were compelled to attend equity training—which included Hackman sessions as an option—as part of EPS’s Achievement and Integration Plan, effective July 2014 to June 2017.

The Center does not have the training materials used in these sessions. But their ideological tenor is suggested by a promotional flyer for a workshop for educators and others that the Hackman Group facilitated in 2015. The

workshop was entitled “More Than Skin Deep: Uprooting White Privilege and White Supremacy One Cell at a Time.”

At this workshop, Hackman trainers—astonishingly—asserted that white racism is biological in nature. “White conditioning begins when white bodies are preverbal,” according to the flyer for the session.

Participants will learn about the “connection between systems of RRW [race, racism and whiteness] and nervous system patterns in the individual and social body of white people.”

As a result for white people, the “work” of racial equity “is about literally becoming a different person from the cells out,” according to the flyer “In order to end systems of racial dominance, we have to end whiteness.

Period.”

It’s safe to say that most Edina residents would reject the racial “equity” training just described as directly at odds with America’s color-blind vision of racial matters. School district leaders’ decision to require teachers and other staff to submit to extremist Hackman Group-type training raises serious questions about both their ideological commitments and their judgment.

Working for the Edina Public Schools: Only social justice warriors need apply?

The EPS’s All for All plan calls for the “recruitment, hiring and retention of racially conscious teachers and administrators.” It’s no surprise, then, that the district’s application for teaching jobs includes an ideological litmus test that appears designed to weed out applicants who diverge from the party line.

Two questions with this apparent intent are included in the Edina Public

inequity and describe what steps you took as a response.” Again, the question presupposes that applicants have seen inequitable conduct by teachers or students in schools, and requires them to describe their response to it even if they believe they have not.

The Edina teacher application also asks candidates how strongly they agree or disagree with 10 statements about race or ethnicity, like the following:

The Hackman Group is operated

by Heather Hackman (center), founder of the Hackman Group that consults with EHS. According to her group’s website, Hackman consults nationally on “issues of deep diversity, equity and social justice and has focused most of her recent training work on issues of racism and white privilege, gender oppression, heterosexism and homophobia, and classism.”

Schools Employment Application form on the EPS website.

The first asks applicants to “[i]dentify what is/isn’t happening in education that contributes to the achievement gap between white students and students of color. In your role, how would you help resolve this dilemma?”

This question assumes that “inequity” in school—undefined, and presumably perpetrated by teachers—is responsible for the failure of black children to perform, on average, at the academic level of white children. Phrased as it is, the question gives applicants no opportunity to discuss the role of socioeconomic factors, such as family breakdown, that contribute to the achievement gap but are beyond schools’ control.

The second question is similar: “Describe an example where you identified

· “It’s important to recognize that a student’s cultural background may influence his/her ability to learn.” · “It’s natural for students with similar backgrounds to congregate/ sit together in the cafeteria.” · “Students’ cultural backgrounds affect how they perceive teachers.” · “Teachers should talk with each other about how students’ cultural backgrounds impact their behavior.”

Many applicants may wonder what the officially approved “equitable” answer is to some of these questions.

For example, is it racist to think black students “naturally” want to sit together at lunch, or is it racist to think the opposite? One thing seems certain: Candidates who guess wrong will not become teachers in the Edina Public Schools.

Since the publication of my original Thinking Minnesota article on racial identity politics in the Edina Public Schools, district leaders have made clear they do not intend to modify or re-examine their curriculum or policies.

Students and families will pay the price.

In the end, only the citizens of Edina can ensure—through public demand— that their schools provide legitimate education, rather than political indoctrination.

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ENERGY POLICY

TheHighCost of Failure

Minnesota has made meager progress in reducing greenhouse gas emissions since 2005.

And it has cost a fortune.

By Steven F. Hayward, Ph.D. and Peter J. Nelson, J.D.

This is an excerpt of a much more comprehensive white paper that can be found at www.AmericanExperiment.org.

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Source: U.S. Energy Information Administration

FIGURE 2: ELECTRIC POWER SECTOR CO2 EMISSIONS AND WIND POWER CAPACITY 40 12,000

Wind and Solar Power are Not Driving Down GHG Emissions

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FIGURE 3: POWER SECTOR CO2 EMISSIONS AND THE SHARE OF WIND GENERATION FOR MN AND THE U.S. Power Sector CO2 Emissions Index (2005=100)

The most glaring failure of Minnesota’s energy policy is this: Increases in renewable energy such as wind and solar power are not driving down carbon dioxide emissions.

Minnesota’s carbon dioxide emissions have fallen only slightly during the same time period it has vastly expanded its renewable energy, and progress in decarbonizing its electricity supply has actually reversed course in the last three years. Figure 1 shows CO2 emissions trends dating back to 1990. After falling 15 percent from the peak in 2005, total CO2 emissions rose 10.4 percent between 2012 and 2014. Overall, CO2 emissions dropped 6.6 percent from 2005 levels. By this measure, there is no way Minnesota will come close to meeting its 15 percent by 2015 GHG emissions reduction goal. State agencies, accounting for all GHG emissions, report even less progress—only a 4 percent reduction in 2014 compared to 2005.

The failure of wind power to reduce CO2 emissions is made especially evident in Figure 2 below, which shows that carbon dioxide emissions from the electricity sector in 2014 were the same as they were in 1990 when there was no wind power in the state. While electric power carbon emissions are lower today than in 2005, the state has made little to no progress since 2009, even as electricity generated by wind increased by 92 percent. Note that the dip in emissions in 2012 and 2013 is directly related to a catastrophic failure that took down Minnesota’s largest coal-fired power plant for 22 months, beginning in November 2011.

Wind power’s failure to meaningfully reduce CO2 emissions in Minnesota is also revealed by comparing Minnesota wind generation and emissions trends to the U.S. as a whole. If wind

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In the latest biennial report to the legislature on GHG emissions, state agencies found that GHG emissions “decreased slightly, about 4 percent, from 2005 to 2014.” That is far short of the 15 percent by 2015 goal.1 To reach GHG emission reduction goals, Minnesota might pay lip service to a broad-based strategy, but, in reality, the strategy focuses almost entirely on reducing emissions from electricity generation. This strategy is failing and will continue to fail.

FIGURE 1: MINNESOTA CO2 EMISSIONS BY SECTOR

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Minnesota’s Energy Policy Fails by its Own Measure

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innesota’s primary energy policy goal is to reduce greenhouse gas emissions (GHG) 15 percent below 2005 levels by 2015, 30 percent by 2025, and 80 percent by 2050. To date, Minnesota has not come close to meeting these goals.

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About the authors: Steven F. Hayward is the senior resident scholar at Institute of Governmental Studies, University of California

at Berkeley and author of the 2011 Almanac of Environmental Trends. Peter J. Nelson was vice president and senior policy fellow at Center of the American Experiment at the time of publication. He is now senior advisor at Centers for Medicare and Medicaid Services.

THINKING MINNESOTA

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Why Renewables Fail and Will Continue to Fail

FIGURE 4: TOTAL MINNESOTA ELECTRICITY DEMAND/ OUTPUT BY MONTH, 2015-2016 6000

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works well to reduce carbon emissions, then Minnesota’s electric power sector should be experiencing far greater emissions reductions than the U.S. However, Figure 3 reveals that CO2 emissions in Minnesota’s electric power sector dropped by about the same level as the U.S between the 2005 baseline and 2014. Despite wind generating 17 percent of Minnesota’s electricity—substantially higher than the 4.4 percent wind generation across the U.S.—electric power sector emissions dropped by 18 percent in Minnesota and 15 percent in the U.S. Again, the apparent drop in 2012 and 2013 in Minnesota is entirely due to the catastrophicfailure of Minnesota’s largest coal-fired power plant.

The U.S. does better than Minnesota when comparing total greenhouse gas emissions. Between 2005 and 2014, GHG emissions dropped by 9.3 percent across the U.S. compared to a 6.6 percent drop in Minnesota.

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FIGURE 5: MINNESOTA WIND POWER OUTPUT BY MONTH, 2015-2016 1,600

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Understanding why renewables fail begins with the inherent intermittency of wind and solar power, which requires backup generation from conventional sources of electricity to assure grid stability during periods of peak demand. The U.S. Department of Energy classifies wind and solar power as non-dispatchable technology—that is, wind and solar are not “on demand” sources of electricity because they depend on optimal wind conditions and sunshine. Solar power obviously produces no power at night (or in the winter when panels may be covered with snow or ice), and wind power falls if the wind stops blowing or blows too hard.

Dispatchable electricity sources include coal, natural gas, and nuclear. The Department of Energy estimates what it calls the capacity factor of different sources of electricity—that is, how much of the time the source can be relied upon to produce power. Coal, natural gas and nuclear power can all produce power 85 to 90 percent of the time, any time of day or night, under any weather conditions. Importantly, down time for these power sources is generally predictable and easily planned around. By contrast, despite improvements in wind and solar technology, the Department of Energy estimates that onshore wind power has a capacity factor of only 41 percent (up from 35 percent in 2014), while solar power has a capacity factor of just 25 percent.

Southwestern Minnesota has a higher capacity factor than the national average (approximately 50 percent) because of more favorable prevailing wind conditions, but the bulk of Minnesota’s electricity usage is in the eastern half of the state, requiring extra expense for transmission lines from most wind power facilities.

Conventional electricity generation facilities can be sited close to existing grid resources and end-users.

The most important factor in thinking about the resource mix of electricity generation is that electricity has to be available at constant and predictable amounts 24/7. Here is how the Department of Energy describes it: “Since load must be balanced on a continuous basis, units whose output can be varied to follow

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demand (dispatchable technologies) generally have more value to a system than less flexible units (non-dispatchable technologies), or those whose operation is tied to the availability of an intermittent resource.”2 Electricity demand in Minnesota varies by time of day and by as much as 40 percent by season, from its lowest points in the spring and fall (when the weather is mildest) to its highest points in the middle of the summer and around the holidays. The data show that wind power produces the least amount of power in the hot summer months when annual power demand peaks. Wind power performs okay in the winter months, but falls precipitously—as much as 50 percent—in the summer months when demand is highest. (See Figures 4 through 7.) When wind power in 2016 slumped by 60 percent in August, the gap was mostly filled by coal-fired and gas-fired power. Coal power increased output 82 percent between April and August in 2016. (See Figure 6.)

This point bears restating in stronger terms. A closer look at the actual power output data reveals facts contrary to the

narrative of the claimed benefits of greater renewable capacity.

Coal accounts for more than 90 percent of total CO2 emissions from the electric power sector, and the fact that total coal-fired electricity production has fallen by much less than the amount of new wind capacity accounts for the lack of progress in reducing CO2 emissions. This is because coal—much more than natural gas—is the swing producer, i.e., coal is the primary backstop when wind production falls.

The inverse relationship between coal and wind output can be seen vividly in Figure 7 below, which displays the relationship between coal and wind output from 2014 through February of 2017. Notice especially that coal power increases sharply in the summer months when wind power declines because of slack prevailing winds. Wind power performs best in the winter months, when power demand experiences its second peak period of the year, but here again Figure 7 shows that coal-fired power is the swing producer in meeting the higher demand.

FIGURE 8: MINNESOTA ENERGY USE, 2015

Electricity, 41.2%

Fossil Fuel, 58.8%

FIGURE 6: TOTAL OUTPUT FROM MAJOR SOURCES Source: U.S. Energy Information Administration

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FIGURE 7: ELECTRICITY OUTPUT FROM COAL AND WIND, JANUARY 2014 TO FEBRUARY 2017 3,500

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2,000

If the primary object of Minnesota’s energy policy is decarbonization, it should allow undistorted market forces to determine the mix of sources to displace coal. This may mean wind in some cases, but will probably mean more natural gas. Numerous studies show the most effective emission reduction strategies rely primarily on natural gas, not wind.3 Natural gas emits far lower emissions than coal without any of the severe intermittency problems posed by renewables.

Minnesota’s experience compared to the U.S. strongly suggests the state is making a serious mistake by focusing too much on wind and solar. While Minnesota has been ramping up wind, most of the rest of the country has been shifting to natural gas.

Minnesota is also relying more on natural gas, but not nearly as much as other states. Between 2005 and 2015, natural gas generation grew from a 5.1 percent share to a 13.0 percent share of Minnesota’s electricity generation. By contrast, natural gas grew from an 18.8 percent share to a 32.7 percent share across the U.S. These data suggest the rest of the country, by relying on natural gas, achieved the same, but still limited level of emissions reduction as Minnesota, but at a lower price. Recall that it was during this same time-period that Minnesota lost its historic electricity pricing advantage.

1,500

Emphasis on electricity generation addresses only a fraction of energy use

1,000

0

Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17

500

Coal

Wind

Source: U.S. Energy Information Administration

Even if Minnesota were to devise a better strategy to reduce emissions from the electric power sector, the impact on total GHG emissions would still be very limited. Electricity, as shown in Figure 8, only accounts for about 40 percent of final energy use in the state. More important, 70 percent of fossil fuel consumption in Minnesota is used for purposes other than THINKING MINNESOTA

WINTER 2018 35

generating electricity, such as transportation and home heating, which is predominantly supplied by natural gas. This means that the principal emphasis of Minnesota’s energy policy is aimed at a fraction of overall energy use. Generating 25 percent of Minnesota’s electricity from renewable sources would mean that it would only be generating about 15 to 20 percent of total energy from renewable sources at best.

However, make no mistake, government mandates come at a cost. There are a number of costs involved with mandating renewable energy.

• Stranded costs: Adding new renewable generation when new generation is not needed results in stranded costs related to the loss of value in retiring the existing generation before it has reached the end of its useful life.

Biofuels Production may be Reaching its Limit • Transmission costs: The geographic dispersion of Efforts to address emissions in the largest fraction of energy renewables requires substantially higher investments in use—liquid fuels—emphasize biofuels, especially ethanol transmission to connect to the people who will use it. blended with gasoline. This is another policy that piggybacks on • Backup costs: Renewables’ intermittency—the fact that national mandates and subsidies, though it is far from clear that they produce zero electricity when the wind does not blow ethanol is environmentally preferable to conventional gasoline.4 or the sun does not shine—requires extra generation to In any case, the U.S. Environmenalways be online as a backup. tal Protection Agency has recently • Baseload cycling costs: Ramping reduced the mandated level of ethanol this extra backup baseload generation blending in the nation’s gasoline up and down to accommodate intersupply, and hints at further reductions mittency also comes at a cost to both The U.S. appears to be in the years ahead, far short of the efficiency and wear and tear. close to the limit original ambitious target contemplated • Curtailment costs: When the for the production and by the Bush Administration in 2005. renewables produce too much elecIn other words, the U.S. appears to be tricity at low demand times, power use of corn-based ethanol. close to the limit for the production producers must, at times, shut them and use of corn-based ethanol. down. Under certain contracts, a Minnesota also appears to be reachutility must still pay for the power not ing its biofuel production limits. As produced. the “Minnesota’s 2025 Energy Action • Profile costs: Maybe the largest Plan” notes, Minnesota is far off track cost—the profile cost—results from from reaching its biodiesel content the fact that wind provides electricmandate of 20 percent biodiesel by ity at low demand times (the spring, 2018. Presently, Minnesota can only the fall, and the middle of the night) deliver 55 percent of the biodiesel when prices are very low. capacity to meet this mandate.

The historic reliability and robustness of American energy Accounting for all of these factors is incredibly challenging. systems has led Americans to take energy for granted. With a Adding to the challenge, Minnesota’s major investor-owned few extraordinary exceptions, transportation fuel is always in utility (IOU), Xcel Energy, has little to no incentive to accuabundance, and the lights come on whenever we flip the switch. rately account for the cost. As an IOU, Xcel receives a guaranIn fact, our energy systems are highly complex. Simplistic teed rate of return on all approved capital expenditures. Thus, mandates will stress complex energy systems—especially the so long as spending on renewables is approved, it is guaranteed electricity grid—as they scale up. a higher return. The only thing moderating Xcel’s move to renewables is the possibility of losing price sensitive industrial The Cost and Collateral Damage customers. However, many of these customers, especially in of Minnesota’s Energy Policy the mining industry, are outside of their service territory.

The little progress Minnesota has made in reducing emissions Building Wind Farms to Meet since 2005 has come at a great cost. There is of course the cost Minnesota’s Mandate Has Cost an of building out wind and solar generation capacity. On top of Estimated $10.6 Billion to Date this financial cost, the build-out of renewables also puts the stability of the electric grid at risk and removes substantial acreage While it may be difficult to precisely estimate the full cost of of land from productive use.

Minnesota’s renewable energy mandate, the cost to build out the wind farms currently serving the state’s mandate amounts The Difficulty of Estimating the Cost of to around $10.6 billion. Every year utilities report on the Minnesota Renewable Energy Mandate renewable energy credits (RECs) they use to satisfy the state’s It is difficult to estimate with any precision the cost of Minrenewable energy standard (RES). These RECs are linked to nesota’s rapid expansion into renewable electricity generation. the specific renewable electricity generating facilities respon36 WINTER 2018

THINKING MINNESOTA

sible for the credit, including both utility-owned and independently-owned facilities. Based on these reports, Minnesota utilities depend on wind farms with about 5,000 MW of nameplate capacity to meet the state mandate. The cost of building out these windfarms can be estimated by matching the year a windfarm is built with the capacity-weighted average cost of installing wind for that year, as reported by Berkeley Lab. Add it all up and the wind mills currently meeting Minnesota’s RES cost around $10.6 billion to build.5 These investments are largely in addition to the regular capital investments necessary to maintain the existing system.

Though Xcel Energy might issue press releases claiming renewables are “cost-effective” and at times even claim they are the lowest-cost choice, even Xcel must be forthright in legal filings before the Minnesota Public Utilities Commission (MPUC).6 In Xcel’s latest request for a rate increase they were asked to explain recent capital investments. Here is their response: For at least the last five-years, we have focused on investing in carbon free generation—specifically our nuclear generating units and new wind generation resources—and the transmission system needed to deliver this generation to load.

These investments were in addition to the capital investments we always need to make in our distribution, transmission, and generation assets to help ensure we can safely and reliably serve our customers.7 [Emphasis added] Why did they make these additional investments in carbon-free generation? As they explain, state and federal policies required them.

The State of Minnesota and the federal government have set forth environmental and policy goals that we are obligated to meet. We are also obligated to meet North American Electricity Reliability Corporation (NERC) system reliability standards, and we take seriously our obligations to provide quality customer service and a safe working and operating environment. These needs exist at all times.8

Looking through other filings for rate increases reveals that most utilities at least in part blame Minnesota’s RES for the need for higher rates.9

Transmission Costs

As Xcel acknowledges in its rate increase request, a portion of its capital investment in recent years went to fund transmission upgrades needed to deliver the new load from new wind facilities. This represents a substantial and often overlooked component of the cost of mandating renewable energy. According to Xcel’s most recent Renewable Energy Rate Impact Report, transmission project costs attributable to Minnesota’s RES equal $1.8 billion.10 This is no doubt a conservative estimate. Assuming a similar cost to the rest of Minnesota’s utilities, installing new transmission to meet the RES costs roughly $4 billion statewide.

Profile Costs

Wind is a very low “value” energy source.

That’s because the wind blows the strongest and, therefore, produces the most electricity when demand for electricity is the lowest.

This is true on both a seasonal and a daily basis.

Wind blows strongest in the spring and the fall and at night when electricity usage is the lowest. As a result, wind on average sells at a lower price than other sources of electricity. The lower sale price imposes a cost, which is referred to as a “profile cost.” At many times during the year, the demand for power when the wind is blowing is so low that the price of wind goes negative, meaning utilities must literally pay someone to take their wind power.

This profile cost is hard to quantify because wind production data is usually considered proprietary and nonpublic. However, one wind farm in Minnesota—the Wapsipinicon wind farm—has published this data.

A review of this data confirms that the contract for this wind farm has cost the Southern Minnesota Municipal Power Agency (SMMPA) millions of dollars.11 SMMPA contracted to buy wind at 6.2 cents per kWh in 2012 and 6.3 cents per kWh in 2013. Yet the wind on average only sold for 1.8 cents per kWh in 2012 and 2.4 cents per kWh in 2013. That resulted in a loss of $14.6 million in 2012 and $12.7 million in 2013, compared to what SMMPA could have paid buying electricity on the wholesale market.

Less Grid Stability

On top of these quantifiable costs, a basic threshold question about wind is rarely asked or answered: Can wind power guarantee reTHINKING MINNESOTA

WINTER 2018 37

liable, on-demand electricity? Until there is a substantial breakthrough in mass electricity storage technology, the answer is going to be No. This is not acceptable for major metropolitan areas or any substantial commercial enterprise, especially a wireless communications or data server facility. (For example, there is not a single metals smelter anywhere in the world powered exclusively by wind or solar power.)

The increased emphasis on renewable energy sources is represented as an increase in the diversity of the generation portfolio, but the irony is that it might lead to less system stability and reliability, and not just because of the intermittency of wind power. The Department of Energy’s recent report on grid stability warns: In regions with high penetration of VRE [variable renewable energy], sharper fluctuations in net load require increased flexibility (ramping up and down) from conventional sources. . . . Generator profitability could become a public policy concern if so much generation is financially challenged that the reliability or resilience of the BPS [bulk power systems] becomes threatened. New market structures may be necessary to reflect these market dynamics, particularly in an industry in which suppliers with high fixed capital costs and relatively low marginal costs often struggle to recover their long-run average costs. . . .

Maintaining short-term reliability has grown more complex in light of higher levels of VRE. . . . Simple extrapolation of previous reliability trends is not prudent.12 Minnesota’s electricity sector is part of MISO—the Midcontinent Independent System Operator—that manages the wholesale electricity market and grid stability for all or part of 13 states stretching all the way down the Mississippi River basin to include Louisiana. (MISO is one of nine regional wholesale electricity markets in the continental U.S.) Electricity systems are required to maintain a minimum 15 percent reserve margin to allow for supply outages and surges in demand. In 2016 MISO maintained an average reserve of 18 percent; however, this was the lowest reserve margin of the nine regional wholesale power market systems. (By comparison, the Atlantic regional wholesale market has maintained a reserve margin between 25 and 33 percent over the last five years.) At present Minnesota obtains only a very small amount of its electricity from interstate purchases. The Department of Energy notes that regulatory mandates such as renewable portfolio standards (RPSs) are eroding baseload generating capacity and that the risk to grid stability could grow in the future: “Investments required for regulatory compliance have also negatively impacted baseload plant economics, and the peak in baseload plant retirements (2015) correlated with deadlines for power plant regulations as well as strong signals of future regulation. . . . States and regions are accepting increased risks that could affect the future reliability and resilience of electricity delivery for consumers in their regions.”13 While Minnesota’s RPS policies alone may not erode the region’s overall grid resiliency, 38 WINTER 2018

THINKING MINNESOTA

60

FIGURE 9: COMPARISON OF LAND AREA AND ELECTRICITY OUTPUT OF WIND AND NUCLEAR 1,200

50

1,000

40

800

30

600

20

400

10

200

0

0 Land area/sq mi

Nobles Wind Project

Output (MW)

Prairie Island Nuclear

Source: U.S. Energy Information Administration and Nuclear Regulatory Commission

they do mean that Minnesota could become more dependent on out-of-state electricity purchases in the future.

Moreover, if the answer to the intermittency or low seasonal output of wind power is to build extra wind capacity for low output periods, the cost competitiveness of wind power will vanish.

Resource Tradeoff

Another source of collateral damage from Minnesota’s RES is the resource tradeoffs involved in adding renewables. Traditional electricity generation plants require a much smaller land footprint than wind or solar. According to U.S. Department of Energy data for 2015, Minnesota’s Prairie Island nuclear power plant produced ten times as much electricity as the largest wind power “farm” in the state, the Nobles Wind Project that straddles Nobles and Murray Counties (7,375 gigawatts from Prairie Island versus 741 megawatts from Nobles Wind Project in 2015).14 The land and materials footprints of these two sources of power deserve a close comparison.

The Nobles Wind Project comprises 134 separate wind turbines spread over 56 square miles, and can produce 201 MW per hour of electricity under optimal wind conditions (compared to over 1 GW per hour by Prairie Island), which is at a wind speed of about 27 mph. The Prairie Island facility has a total land footprint of 578 acres—less than one square mile.15 (See Figure 9. The land footprint of Prairie Island is so small that it barely shows up on the scale.) A back-of-the-envelope calculation suggests that to replace Prairie Island’s capacity with wind power would require a land footprint of about 300 square miles.

Figure 10 illustrates that while wind power on paper may be capable of producing more electricity than nuclear power (what is called “Nameplate” capacity in the electricity trade), in practice nuclear power produces more.

FIGURE 10: ELECTRICITY OUTPUT FROM COAL AND WIND, JANUARY 2014 TO FEBRUARY 2017

14,000 12,000 10,000 8,000 6,000 4,000

2,000 0

Nameplate Capacity Source: U.S. Energy Information Administration

Nuclear Capacity

Actual Output Wind Capacity

Conclusion

Legislation passed in 2017 reveals the Minnesota legislature understands the problem rising electricity prices pose to the state. Until this year, state energy goals largely ignored the cost involved in achieving them. But the Minnesota legislature recently enshrined one more energy goal into state

statute that directs utilities to aim for electricity rates to “be at least five percent below the national average.”16 What this means is that the MPUC must now balance the cost of achieving the state’s various green energy goals with the cost.17 This report shows how Minnesota fails to come close to meeting near-term greenhouse gas emission reduction goals and how hopelessly unattainable it is to reach the longer-term goals. Considering these future goals are unattainable without great cost and hardship, the new goal to keep Minnesota electricity prices lower than the national average might appear to be in direct conflict.

Though a conflict may now exist among the goals, this rivalry will hopefully lead to a more measured and effective approach to reducing greenhouse gas emissions. Instead of rubberstamping a renewable energy project just because it might advance Minnesota’s green energy goals, moving forward the MPUC should now take greater care in evaluating alternatives and whether the project undermines competitive electricity rates.

The change is welcome, but will it be enough? Minnesota electricity rates are now higher than the nation’s, but substantial investments in new wind and solar have already been approved by the MPUC, despite no increase in demand. Getting back to a proper balance will almost certainly require further updates to state law.

Endnotes 1. Minnesota Pollution Control Agency and Minnesota Department of Commerce, “Greenhouse Gas Emissions: 1990-2014,” (January 2017).

2. U.S. Energy Information Administration, “Levelized Cost and Levelized Avoided Cost of New Generation Resources in the Annual Energy Outlook 2017,” April 2017, p.

2; https://www.eia.gov/outlooks/aeo/pdf/electricity_generation.pdf.

3. See, e.g., Charles R. Frank, Jr., “The Net Benefits of Low and No-Carbon Electricity Technologies,” Brookings Institute Global Economy & Development Working Paper, p. 73, (May 2014). (“Assuming that reductions in carbon dioxide emissions are valued at $50 per metric ton and the price of natural gas is not much greater than $16 per million Btu, the net benefits of new nuclear, hydro, and natural gas combined cycle plants far outweigh the net benefits of new wind or solar plants. Wind and solar power are very costly from a social perspective because of their very high capacity cost, their very low capacity factors, and their lack of reliability.”)

4. See, e.g., “Water Implications of Biofuels Production in the United States,” National Research Council, National Academies Press, 2008, https://www.nap.edu/ catalog/12039/water-implications-of-biofuels-production-in-the-united-states. Among other findings: “If projected future increases in the use of corn for ethanol production do occur, the increase in harm to water quality could be considerable.”

5. This calculation is based on the wind farms identified in Minnesota electric utility Renewable Energy Certificate Retirement Reports issued for the 2012 to 2016 reporting periods; M-RETS data on wind farm commencement dates; and annual estimates of construction costs from Berkeley Lab for the U.S. Department of Energy.

6. Xcel Energy, Press Release, “Xcel Energy Announces the Nation’s Largest MultiState Investment in Wind Energy,” March 3, 2017, and Xcel Energy, Press Release, “Xcel Energy achieves wind energy milestone,” March 19, 2013.

7. Aakash H. Chandarana, “In the Matter of the Application of Northern States Power Company for Authority to Increase Rates for Electric Service in Minnesota,” Direct Testimony and Schedules, November 2, 2015, https://www.edockets.state.mn.us/ EFiling/edockets/searchDocuments.do?method=showPoup&documentId={69F2C48988E7-46A5-B458-0358311E4CF0}&documentTitle=201511-115332-01.

8. Ibid.

9. See “Energy Policy in Minnesota: The High Cost of Failure” at https://www.

AmericanExperiment.org.

10. Xcel Energy, “Renewable Energy Standard (RES) Rate Impact Report,” January 2015, https://www.xcelenergy.com/staticfiles/xe/PDF/Regulatory/09-App-F-NSP-RESRate-Impact-Report-January-2015.pdf.

11. Tyler McNeal, “Profile Costs as a Component of Integration Costs in Wind Energy,” Comparative Advantage (Spring 2016), available at https://economics.stanford. edu/sites/default/files/comparative-advantage-2016.pdf.

12. U.S. Department of Energy, Staff Report on Electricity Markets and Reliability [SREMR], (August 2017), pp. 61, 63, 82, 118, available at https://energy.gov/downloads/download-staff-report-secretary-electricity-markets-and-reliability.

13. Ibid., p. 14.

14. U.S. Energy Information Administration, Table 2B, https://www.eia.gov/electricity/state/minnesota/index.php.

15. Prairie Island Environmental Impact Statement, Nuclear Regulatory Commission, p. 2-24, https://www.nrc.gov/reading-rm/doc-collections/nuregs/staff/sr1437/ supplement39/sr1437s39.pdf.

16. Minn. Stat. § 216C.05.

17. Long before the state established its present green energy goals, state law directed the MPUC “to provide the retail consumers of natural gas and electric service in this state with adequate and reliable services at reasonable rates.” Minn. Stat. § 216B.01. That language promoting reasonable rates still exists in state statute, but has been largely ignored and replaced by the more specific green energy goals added over the years.

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UPDATE: Minnesota Can Do Better

Still Not as Good asYouThink

A serious look at our economy dispels the political hype that Minnesota is a ‘blue state that works.’

M

oney isn’t everything, but a strong and growing economy is vital for many of the things we take for granted living in Minnesota. Without high incomes, we would struggle to cope with the harsh winter weather or support the vibrant cultural life we take pride in. Nor would we be able to fund services such as education and policing.

Indeed, Minnesota’s economy is often touted as a poster child for “Blue State” policies of high taxes and government spending and extensive regulation. To assess the truth of such panegyrics, in 2016 the Center of the American Experiment commissioned Dr. Joseph Kennedy to take an in depth look at Minnesota’s economy. The results were released in a report, “Minnesota’s Economy: Mediocre Performance Threatens the State’s Future.”

This year we have looked at the data again. We have another year of data to analyze and, more importantly, we apply a framework of economic growth theory to look at the prospects for Minnesota’s economic future. After plundering our thesaurus, this time around we find that Minnesota’s economic performance is lackluster.

Economic growth

Minnesotans take great pride in their state’s economy, and quite rightly. It provides them with one of the highest stan-

40 WINTER 2018

THINKING MINNESOTA

dards of living in the country. Between 1965 and 1997, the state’s annual growth rate of real GDP—the amount of goods and services produced in an economy adjusted for inflation—was 3.1 percent, slightly above the national average of 2.9 percent.

In recent years, this has not been the case. Since 2000, the state’s real GDP grew at a rate below the national average and is now 2.5 percent lower than it would be if it had matched it. This cannot be attributed to “convergence,” in which incomes in poorer areas grow faster than those in richer ones. Recent academic work by Peter Ganong of the University of Chicago and Daniel Shoag of Harvard shows that, over the period covered by our report, no such convergence has been taking place in the United States.

We see a similar story when we look within the state. Among the 15 Metro-

politan Statistical Areas (MSAs) with the largest GDP in 2016, the Twin Cities rank 12th on real GDP growth since 2000. Mankato and Rochester show the strongest growth since 2000. But, when growth in Minnesota’s MSAs is compared with that in the MSAs in the four neighboring states (30 in all), only Mankato makes it into the top 10. Notably, Iowa has three of the top ten fastest growing MSAs in that group.

Once again, this cannot be blamed on convergence. A recent study by Elisa Giannone of Princeton finds that, during the period covered by our report, convergence has declined in cities too. It should also be noted that some of the MSAs the Twin Cities have outperformed include Chicago and Detroit, which have welldocumented, structural problems. The Twin Cities should not be content simply to outperform them.

About the Author: John Phelan is a graduate of Birkbeck

College, University of London, where he earned a BSc in Economics, and of the London School of Economics where he earned an MSc. He worked in finance for 10 years before becoming a professional economist. At Capital Economics in London, he wrote reports ranging from the impact of Brexit on the British economy to the effect of government regulation on cell phone coverage. John has written for City AM in London, the Wall Street Journal (in both Europe and the U.S.) and the journal Economic Affairs.

Productivity

Perhaps most worrying is Minnesota’s poor record on productivity. This is an absolutely vital economic variable which we return to throughout the report. Increased productivity is the bedrock of improved standards of living. As the economist Paul Krugman has said, “Productivity isn’t everything, but in the long run it is almost everything. A country’s ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker.”

So, it is a concern that on one common measure of productivity, GDP per employee, Minnesotan workers produce 8.2 percent less than the national average.

Of course, this measure can be skewed by part time workers who count the same as full time ones but generally produce less.

It also masks the variation between differ-

Minnesotan workers lag the national average in goods production by 5.5 percent and in services by 7.6 percent. ent sectors. So, to take some of this into account, we can look at GDP per hour worked in both the goods producing and service producing industries, for which data goes back to 2007. Sadly, we see the same story. Minnesotan workers lag the national average in goods production by 5.5 percent and in services by 7.6 percent.

The trends in these numbers are also a concern. True, productivity growth has been sluggish at the national level since the financial crisis. But Minnesota now consistently lags the national average on real GDP per worker by more than it did in the early 2000s. On real GDP per hour worked in goods production, Minnesota has flat lined like the rest of the country since 2010. In services production, however, while the national level of real GDP per hour worked is about where it was in 2010, in Minnesota it is lower. This is a particular source of concern as this is where many of the state’s new jobs have been found in recent years.

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Jobs

Minnesota enjoys a low unemployment rate. During 2016, its unemployment rate of 3.9 percent was comfortably below the national average of 4.7 percent. Its Labor Force Participation rate—the share of the workforce in work or looking for work —remains above the national average. The state has a lower share of households with no 42 WINTER 2018

THINKING MINNESOTA

Figure 17: Minnesota GVA and Job Growth GVA AND JOB GROWTH FIGURE 1: MINNESOTA $600,000

Figure 1: Minnesota GVA per job and job growth, 2000 to 2016

90%

$500,000

70%

$400,000 $300,000

50%

$200,000

30%

$100,000

10%

Gross Value Added per Job, 2016

Leisure & Hospitality

Educational Svcs.

Retail Trade

Other Svcs.

Health Care

Prof.& Bus. Svcs.

Construction

Durable Goods Mfg.

Transp. & Utilities

-$300,000

Wholesale Trade

-$200,000

Non-Durable Goods Mfg.

-$100,000

Information

$0

Mining & Logging

It is often pointed out that incomes in Minnesota are high relative to the national average. It is true that Minnesota’s average level of Personal Income (a measure of income received from wages, capital, and transfers), $52,117, ranks 14th in the country.

But even here, the picture is not as good as it first appears. Since 2000, Personal Income growth in Minnesota has matched the national average but has been slower than in 31 other states.

With growth in disposable Personal Income—that left after taxes—Minnesota lagged 30 states between 2000 and 2016, but was a little behind the national average. Once again, the points about “convergence” apply.

Furthermore, what growth there has been has been in Personal Income has come in large part from an increase in transfer income, such as Social Security. This accounted for 47 percent of all Personal Income growth since 2000.

Indeed, over that period transfer income in Minnesota grew by 69.1 percent while the national figure was 59.9 percent.

This is unsustainable. Income received in return for performing labor or renting out capital is good, from an economic perspective. It is received in return for producing goods or services, and the production of goods and services is what GDP measures. More of this means higher GDP. Transfer income, by contrast, is not received in return for productive activity. For the transfer of income to take place, the income must first be generated by the productive economic activities of labor and capital. These transfers may be deemed necessary, but it is a worrying sign, both nationally and at the state level, that they comprise an ever growing share of American incomes.

Financial Activities

Incomes

-10% -30% -50%

Change in Jobs, 2000-2016

Source: Bureau BureauofofLabor Economic Analysis; Bureau of Labor Statistics Sources: Statistics and Bureau of Economic Analysis or one worker than the national rate, and a higher share with two, three, or more workers.

But, again, a deeper look at the data reveals cause for concern. Between 2000 and 2016, Minnesota ranked 28th out of 50 states and the District of Columbia on job creation. It lagged the national average rate.

Perhaps most concerning, given the importance of productivity, is where these jobs have been found. Figure 1 shows the Gross Value Added (GVA) associated with the average job in various occupational categories as well as the percentage increase or decrease in those jobs since 2000. Mining & Logging, for example, generated $447,603 per job in 2016 and Information generated $319,596. But, in the previous 16 years, Minnesota lost 23.5 percent of its jobs in Mining & Logging and 26.9 percent of those in Information. In contrast, the fastest growing occupations, Health Care and Educational Services, have a relatively low GVA per job. Health Care jobs, for example, generate an average of $88,761 of GVA annually, but jobs there have increased by 60.8 percent since 2000. Educational Services jobs generate an average of $58,239 of GVA annually, and employment in that sector has risen by 61.2 percent over the

period. This is undoubtedly part of the state’s productivity problem.

The Prospects for Minnesota’s Economic Future This takes us from 2000 to 2016. But what might the future hold?

The sources of GDP per capita growth

GDP per-capita income is what matters for the well-being of individuals.

This is GDP divided by the number of people in that economy. Its growth rate is the sum of the growth rates of 1) labor force participation, 2) capital per worker, and 3) productivity. We can look at the prospects for each of these to see where Minnesota’s economy might be heading.

Minnesota’s labor force PAGE 16 A higher share of people working will mean more GDP to be divided among the population. So, a high Labor Force Participation Rate helps per capita GDP growth.

The outlook on labor force participation is poor. Minnesota faces the demographic challenge common to the west of an aging population. Its Labor Force Participation Rate will fall as Baby Boomers retire. From a current level of 69.1 percent, the Minnesota Demographic

Center projects that it will fall to 64.6 percent in 2035.

With a smaller share of Minnesotans working, there will be less GDP to divide among the population. This will lead to falling GDP per capita unless the remaining workers can become more productive. Minnesota’s state economist, Laura Kalambokidis, made this point at a conference at the Federal Reserve Bank of Minneapolis recently.

It takes us back, once again, to the importance of productivity.

One thing that will help is for Minnesota to retain and attract productive workers. Immigration is often mooted as the solution to aging populations and declining rates of Labor Force Participation. But this will only be the case if the workers who come in are more productive than the average of workers already here. If they are, they will increase GDP by more than they increase the capita, increasing GDP per capita. If they are less productive, however, they will increase the capita by more than the GDP and reduce GDP per capita.

Sadly, the evidence suggests that Minnesota is doing a bad job of attracting and retaining productive American workers.

Using income as a proxy for productivity, Census Bureau evidence shows that, between 2011 and 2015, Minnesota saw a net inflow of residents with annual incomes below $25,000, and a net outflow of residents in every income category above that. Neither of these is simply “snow birds” heading to warmer climates.

Over the same period, Minnesota suffered a net domestic out-migration in every single age category, with Under 26 being the third worst.

What drives this? Minnesota’s high taxes play a part. As a share of state income, state-local taxes are higher in Minnesota than in all but seven other states. Our top rate of income tax is the fourth highest in the country. Significantly, it is not just “the rich” who are taxed heavily. Minnesota’s lowest income tax rate is higher than the highest rate in 23 other states.

Capital per worker

If a worker is given tools to work with he or she will, up to a certain point, be able to produce more. One farmer can

cut more corn with a scythe than with his or her bare hands. Increases in capital per worker can make those workers more productive.

Unfortunately, data for capital per worker at the state level is very hard to come by, but is driven by returns on investment, which are primarily affected by tax rates. The most recent academic estimates by Cal State’s Steven Yamarik are six years old and cover the period 1990 to 2007.

Here again, Minnesota’s taxes are not conducive to continued economic growth at past rates. The Tax Foundation ranks the state 46th out of 50 for its business tax climate. Our corporate taxes are

Sadly, the evidence suggests that Minnesota is doing a bad job of attracting and retaining productive American workers. more complex than in many other states.

We impose a deduction schedule for natural resources on top of the federal one, and we are one of only eight states to have an Alternative Minimum Tax on corporations. Our corporate income tax rate is the third highest in the country.

On top of the federal rate, this gives Minnesota one of the highest rates of corporate taxation in the western world.

We see some of the effects of this in Minnesota’s poor record of attracting venture capital. In 2015, the average American worker had $391 of venture capital behind them. In Minnesota, the figure was just $108. This, in turn, shows up in our relatively low rate of new business creation. In 2000, these made up 43 percent of American businesses and 41 percent in Minnesota. By 2014, these figures had slumped to 34 percent and 30 percent.

Total Factor Productivity

The key to growth lies not so much in adding new labor and capital inputs,

but in increasing the quality of these inputs— educating workers, swapping a combine harvester for a scythe—and the skill with which they are combined: entrepreneurship. Economists group these together in the category “Total Factor Productivity” (TFP), and this is where the real engines of economic growth are to be found.

IMF research into economic growth among the states suggests that growth in TFP is driven by research and development spending and educational attainment. As a share of state GDP, in 2014 Minnesota’s spending on research and development, 2.5 percent, was in line with the national average, and our state has the fourth best record in America for patents per million people, with 885.

Education has long been one of Minnesota’s strong points. Compared to the national averages, our state compares favourably on a range of educational outcomes, though our mediocre performance on AP scores should be noted.

An educated workforce should be an economic bonus in the future if education remains the focus of teaching, and not political indoctrination.

Minnesota can do better Looking to the future, Minnesota will face economic challenges. The state’s relatively well-educated workforce will be a definite asset if academic standards are maintained. But Minnesota also faces some headwinds that could hinder future growth. As Baby Boomers retire, the state’s labor force will shrink, providing a drag on growth for perhaps the next two decades. An increasing share of seniors will need workers in productive jobs to support them and the growing number of workers who will be required in low productivity sectors such as health care. Yet, the high rate of corporate tax will deter the investment needed to make workers more productive. And Minnesota lags the rest of the nation in Research & Development spending.

Minnesota has some historic advantages, but prosperity should not be taken for granted. Minnesotans and their policymakers will have to make their state more competitive to assure Minnesota’s future prosperity.

THINKING MINNESOTA

WINTER 2018 43

INTERVIEW

The Case for

MIDWESTERN HISTORY

No region has suffered more from historical neglect than the Midwest.

by Jon K. Lauck

Editor’s Note: Mr. Lauck’s article is followed by a Q&A conducted by John Hinderaker, president of Center of the American Experiment.

44 WINTER 2018 THINKING MINNESOTA

F

ears about the deepening ignorance of our national history in the United States are becoming more intense. Too many kids, it is frequently reported, think that the Civil War happened during the 1980s and that Thomas Jefferson was a sit-com star. A republic, dependent on an educated citizenry which can smoke out fake news and biased information, cannot long endure under such conditions.

Portions of the chattering class acknowledge the deficits in our historical awareness, which can be counted as a good thing. But one angle on the history crisis that has received less attention is the diminishment of professional attention to American regions and the local particularities of American life, an aspect of the crisis that might, if better understood, propel us toward a broader solution.

No region has suffered more from historical neglect than the Midwest, which, in comparison to other regions, receives much less support for studying its history from its regional universities. Many universities in the Midwest don’t even offer a course on Midwestern history, a failure of basic leadership in the region that would be unheard of in the South or West. The University of Minnesota (U of M), for example, despite the institution’s broad reach and thousands of employees, does not offer a class on the history of Minnesota or the Midwest.

It wasn’t always so. In 1907, several historians from Midwestern universities and historical societies met in Lincoln, Nebraska and launched the Mississippi Valley Historical Association (MVHA) to promote the study of the Midwest. They were aided by prominent historians in states such as Illinois and historical societies in Wisconsin and

Minnesota. Solon Buck, for example, who was the director of the Minnesota Historical Society (MHS), was an active leader of this group, as was U of M historian Theodore Blegen, who made the case for studying the region in his book “Grassroots History” (1947). Even the president of the U of M, Guy Stanton Ford, was a staunch supporter of Midwestern history. One of Ford’s predecessors, U of M president William Watts Folwell, even wrote a massive history of the state of Minnesota.

This tight focus on Midwestern history included support for university presses that published books about the region, including the University of Minnesota Press, which was launched in 1925. It also included writing programs designed to allow local and regional writers to hone their craft. A unifying goal of these efforts was the advance of cultural regionalism, or the idea that the varied regions of the United States deserved to have a homegrown cultural tradition and not one dictated to them by the East Coast. Midwesterners such as Hamlin Garland, who matured in Wisconsin, Iowa, and South Dakota, became famous by resisting the cultural dominance of the East.

The Mississippi Valley Historical Association purposely held its meetings in the Midwest (its second meeting, following the first meeting held in Lincoln, Nebraska, was held at Lake Minnetonka, west of the Twin Cities). This created a focus on the region, a degree of mutual support among regional historians, and an esprit de corps. The organization thrived for decades, but after World War II several younger members, mostly from About the Author: Jon

Lauck is the founding president of the Midwestern History Association and a contributor at The American Project at Pepperdine School of Public Policy. His new book on the Midwest, “From Warm Center to Ragged Edge,” was recently published by University of Iowa Press.

THINKING MINNESOTA WINTER 2018 45

outside the region, thought the MVHA was too “provincial.” As a result, and by way of some sly bureaucratic machinations, the old MVHA was declared a “national” organization.

There were several advantages to this new status for the newly-minted Organization of American Historians, but it cast aside decades of tradition and left historians interested in the Midwest without a scholarly home. While the Southern Historical Association and the Western History Association remained strong and were growing, regional history in the Midwest shriveled. For a half-century, the Midwest had no professional history organization focused on the region’s history and thus, the region was greatly understudied. The region became a symbol, writ small, of the broader collapse of historical knowledge.

Big Ten institutions should have kept these fields alive.

The principles at stake here are not insignificant. For history to thrive again, it needs to connect to the lived experience of people, which a relatable and tangible regional history can do. Educators need to understand the natural human desire for rootedness and the need to know one’s own story, a need which a localized and relevant history can serve.

This is particularly important in an age of anxiety over the disconnectedness generated by life online. One cure for the disorientation of cyber-life is to dig down into the tangible realities of one’s place.Understanding your own place may also dilute the intensity of the narcissism generated by social media. Instead of being diverted by your Facebook “friends” and their trips to Malibu and Miami, knowing your history causes you to think about your place and to attach value to it.

Knowing the history of your particular place makes you want to preserve it and make it better. It makes you more likely to run for school board and less likely to buy a new pair of shoes on Amazon.

For the Midwest in recent years, there 46 WINTER 2018 THINKING MINNESOTA

are a few encouraging signs of historical recovery. After an impromptu initial gathering at a bar in Hudson, Wisconsin and some subsequent planning meetings, the Midwestern History Association was formed 2014, filling a void left by the demise of the Mississippi Valley Historical Association in the 1960s. New journals such as Middle West Review and Studies in Midwestern History have also been launched. The Hauenstein Center at Grand Valley State University in Michigan has stepped up to host the annual conferences of the MHA, another one of which is being planned for June 6, 2018 in Grand Rapids.

While this is surely progress for the Midwest, for the nation at large we still face a yawning void of historical illiteracy that is weakening the republic and its institutions. Somebody somewhere in some position of authority began to argue that our kids should be taught less history or less history that is critical to the workings of constitutional government. We need to figure out where that went wrong and fix it. Minnesota and the Midwest is a great place to start. Our future history depends on it.

JOHN HINDERAKER: You’ve had an interesting career as a lawyer, a historian, and to some extent, a political figure. Tell us about some of the things you’ve done.

JON LAUCK: I started off with a love of history. After receiving an undergraduate degree in South Dakota, I went to the University of Iowa to get my Ph.D. in history, thinking I would make a career out of that. My dissertation was on the life and times of Karl E. Mundt. I was 21 and didn’t know much about the history profession. I thought that seemed like a great project. But I was completely disabused of that notion. People were like, “No one cares about Karl Mundt.”

Someone mentioned Karl Mundt to me the other day. I hadn’t heard that name in decades.

Maybe he’s making a little come back here. He’s from Madison and after a 35-year career in Congress got mixed up in some interesting things. Anyway, people don’t write those kind of history books anymore. So I moved on to a

different project. My dad was a farmer in South Dakota, and I always heard complaints about the meat packers and the green traders and Cargill, etc. I did an economic analysis of farm markets in the Midwest since World War II, and tried to determine the extent to which they were anti-competitive by various measures and anti-trust test, etc.

In the process of that, I got interested in anti-trust law, and there was a person on my dissertation committee who wrote the top anti-trust textbook in the country.

He co-authored it with Tom Sullivan, the dean of the University of Minnesota Law School. So I decided to go to the U of M Law School and study anti-trust law.

I had decided that the job market was very weak in history, which is even worse now. I moved back to South Dakota to practice at the state’s largest law firm, which I did for three or four years, until out of the blue I got an offer to join the history department at South Dakota State University (SDSU). But then my friend, John Thune, won the Senate race in 2004.

Which you later wrote a book about.

That’s right. So, I helped John with that race and it was a wild race. You know, Newsweek and Roll Call said the South Dakota senate race was the second biggest race in the country in 2004. It became a $50 million race. It became a great subject for a book. Then SDSU asked me to teach a course on the history of South Dakota. I noticed there weren’t any good books on the settlement and development and the growth of South Dakota, so I wrote a book on it called Prairie Republic and focused on the political culture of Dakota Territory and how South Dakota became a state. It was a great project.

In 2013, you wrote a book called The Lost Region about the neglected field of Midwestern history.

The book Prairie Republic came out in 2010. That led directly to my book The Lost Region. Here’s the connection. I did a demographic analysis of the people who settled in South Dakota. They weren’t moving from Florida or Mexico or China.

They were moving into South Dakota from the Midwest, and they brought with them their political culture from Midwest-

ern states like Indiana and Wisconsin and Minnesota. I wanted to know more about what that meant and how it shaped the political culture. I discovered there was very little written about the history of the Midwest. Almost nothing. So, I wrote this book in 2013, The Lost Region: Toward a Revival of Midwestern History, which was designed to get the Midwest back on the historical map.

How is that going?

Very well. We started on a lark at a Great Plains history conference that was meeting in Hudson, Wisconsin in the fall of 2013. I just asked a bunch of people if they were interested in why is there no Midwestern history? We had a panel about it. Then we moved to Buxter’s Bar in Hudson to discuss it more. I thought a couple people would show up, but like 35 historians did. They were very interested, so we formed the Midwestern History Association. We formed a partnership with the Hauenstein Center at Grand Valley State in Grand Rapids, Michigan, where we have a conference every summer. It’s really taken off. We’re starting to see the fruits of all that effort in terms of books and articles and new journals about the Midwest.

Until you and your colleagues came along, the study of Midwestern history had just been virtually neglected, even at major Midwestern universities.

Why do you think that is?

Back before World War II, there was an organized effort to study the Midwest. There were major figures at places like the University of Minnesota and Wisconsin and Michigan whose sole mission was to study the Midwest. All those people retired and moved on and were never replaced. So, the field dropped to zilch at these major, Big Ten, research universities. We still have yet to create much of a beachhead on that front.

I met with the chair of the history department at the University of Minnesota a month or so ago. There is no one who teaches the history of Minnesota or the Midwest at the University of Minnesota, which, to me, is a huge failing. The University of Georgia, in contrast, has 10 people teaching the history of the south and Georgia. The next phase of this effort

will be to get at least a couple of these institutions to take this field seriously, so that if a young person wants to write a dissertation about the history of the Midwest, they’ll have a place to go.

What makes this just doubly unfortunate, in my opinion, is that in general the history of the Midwestern states is a history of success. It’s the Midwest where the really positive, successful civic institutions were developed.

That’s really not where the energy is now in the historical profession. There’s a lot of interest now in race, class, and gender. I don’t see those declining in significance in coming decades and probably they’ll become more prominent. But I’ve tried to argue that we need to take regions seriously. You know, like you said, places that have been very successful and have a dense civic culture and a lot of social capital; those would be good places to know more about. But that›s not really what historians are drawn to at the moment.

Your most recent book is From Warm Center to Ragged Edge: The Erosion of Midwestern Literary and Historical Regionalism 1920-1965. Tell us about it.

It is a follow up to The Lost Region. I wanted to do more to explain why Midwestern regional study, both literary and historical, had fallen to such a low level.

The title, From Warm Center to Ragged Edge comes from Fitzgerald, from Gatsby in particular.

Nick Carraway, the main character in Gatsby, is from St. Paul. He fights in World War I, moves to New York and gets involved in the roaring ‘20s. At one point he says he didn’t want to move back to Minnesota because he saw it as the ragged edge of the universe. It was boring; nothing happened there.

He wanted a more exciting life. But by the end of the book, after seeing all he did and the death of Gatsby, he begins to think of Minnesota and the Midwest as the warm center of the world, where he wants to return and live a good life. I thought as a title it conveyed that there is a lot to be admired in the Midwest, and a lot to be studied. We need to move past this ragged edge stage of its history and get back to a point where it’s more

center stage in American history. I think a lot of people have forgotten that the Midwest was once regarded as the center of American culture and literature.

In the decades after the Civil War, the Midwest was ascendant. It was the place where our presidents came from. About eight presidents in a row. It’s where the economy was the strongest. It’s where major corporations developed, like Ford Motor Company, for example. It’s where there was a huge amount of work done to promote civic institutions.

The writer Sherwood Anderson said in about 1914 that he expected the Midwest to remain the center of American culture for centuries to come. Unfortunately, that’s not how it unfolded. We now have a culture that is dominated essentially by Hollywood and Manhattan.

Why do you think that happened?

The prominence of mass culture is something that just diluted the older regional forces in the country in the years after World War II. I think television played a big role in it. In the late 1940s, two percent of Americans had a TV. By 1960, 95 percent had television. Most of the television shows were made in Hollywood and Manhattan. Television’s hold on American culture remained until the coming of the internet, which was a disruptive force that’s allowed space in our culture now for alternative cultural forms to develop. It really opens up new alleys for artists and writers and historians in the Midwest. I don’t think the Midwestern History Association would have been able to grow and thrive without Facebook and Twitter.

I also think there was a real failure of leadership in the Midwest. Big Ten institutions should have kept these fields alive, these fields of regional study, like Midwestern history, but they chose not to. That’s a failure of leadership from the top down at these institutions. They need to take their region more seriously.

Unfortunately, a lot of these people who end up as president of, say, the University of Minnesota, are automatically thinking, “How do I become president of Cornell or Berkeley?” I just think they need to focus on their region more and understand the regional roots of their institutions a little bit better.

THINKING MINNESOTA WINTER 2018 47

FINAL WORD

A YEAR LIKE NO OTHER American Experiment has enjoyed unprecedented levels of success, inside and out.

2017 was a banner year for Center of the

John Hinderaker

American Experiment doesn’t just produce policy papers.

We are in the communications business, and we are getting our messages to more Minnesotans than ever.

48 WINTER 2018

American Experiment, as we influenced events in Minnesota as never before. Here are a few of the highlights: We grew and trended younger in 2017, as we hired Policy Fellow Catrin Thorman, Economist John Phelan, and Donor Relations and Events Coordinator Pari Cariaga. All have been great additions to our team.

We sponsored a full slate of public events, beginning in January with Diana Furchtgott-Roth, who explained why liberal policies are bad for young people. In May, Howard Root told the riveting story of his unjust (and, happily, unsuccessful) prosecution by the Department of Justice to a soldout crowd. Senator Tom Cotton highlighted the Center’s Annual Dinner in June. Our Fall Briefing, in October, featured Mark Steyn and a crowd of 1,000 at the Guthrie Theater. November saw both our final lunch forum of the year, starring Star Parker, and a roast of Mitch Pearlstein, honoring his many years as founder and leader of American Experiment.

In April, we kicked off our Great Jobs Without a Four-Year Degree project with a public event featuring political economist Nick Eberstadt. In September, we released a paper by Dr. Amanda Griffith that showed many occupations that do not require four-year college degrees (carpenters, CNC programmers, electricians, etc.) earn more over a career in Minnesota than the median four-year graduate.

Just after Memorial Day, we released a report on Twin Cities congestion by Randal O’Toole. We bought billboards, including one at the intersection of Highways 494 and 35W, to publicize the fact that Twin Cities congestion is much worse than in comparable cities, and is the result of political decisions by unelected agencies. We passed out bumper stickers, sponsored traffic reports and played 30-second radio ads on stations around the

THINKING MINNESOTA

metro area.

We led the fight for freedom from unwanted unions on behalf of personal care attendants, many of whom, informed of their legal options, have now left the union.

Katherine Kersten’s cover story in the fall issue of Thinking Minnesota on left-wing political indoctrination in the public schools.

In October, we also published a paper on the failure of wind energy in Minnesota, authored by Steven Hayward and Peter Nelson that ignited a vigorous debate over energy and electricity rates.

In November, John Phelan updated last year’s report by Dr. Joseph Kennedy on Minnesota’s economy with a paper titled “The State of Minnesota’s Economy 2017: Performance continues to be lackluster.” Thanks to the Center’s efforts, more and more Minnesotans are catching on to the fact that our state’s economic performance is nowhere near as strong as is commonly alleged.

The end of the year saw one bittersweet change.

Vice President and Senior Policy Fellow Peter Nelson left us to take a position in the Department of Health and Human Services, where he will have broad responsibility for federal health care regulation.

American Experiment doesn’t just produce policy papers. We are in the communications business, as well, and we are getting our messages to more Minnesotans than ever. Through various media, everything from billboards to op-eds to radio to television to videos and more, we connected with Minnesotans more than 30 million times last year. We published more than 100 different op-eds in over 90 newspapers. We placed issue ads on more than 90 radio stations. Thinking Minnesota continues to grow, with a circulation of 80,000 for the fall issue. Our website, AmericanExperiment. org, more than doubled its traffic over 2016.

And we are just getting warmed up. Wait until you see what we have on tap for 2018!

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